The Coase theorem suggests that negative externalities occur, in part, because of a lack of clearly defined:
A) government regulations.
B) corrective taxes.
C) transaction costs.
D) property rights.

Question

Quizplus · Accepted Answer

The Coase theorem posits that if property rights are clearly defined and transaction costs are low, externalities (negative or positive) can be efficiently resolved through bargaining between parties. It emphasizes the importance of clearly defined property rights for the efficient allocation of resources.

The Coase Theorem Suggests That Negative Externalities Occur, in Part