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Private Solutions to Externalities: The Coase Theorem
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Problem 10
Private Solutions to Externalities: The Coase Theorem
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7. Externalities / Private Solutions to Externalities: The Coase Theorem / Problem 8
Problem 8
According to the Coase Theorem, why can an efficient outcome be reached regardless of which party holds the property rights?
A
Because parties can negotiate to reach a mutually beneficial agreement.
B
Because externalities are eliminated.
C
Because transaction costs are always zero.
D
Because government intervention ensures efficiency.
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