The Coase Theorem Will Apply Only When

Multiple Choice

The Coase theorem will apply only when

A) an individual who is not affected by the externality can negotiate a settlement between the parties imposing the externality and the parties that are harmed by the externality.
B) transactions cost are low.
C) the market is perfectly competitive.
D) the courts can be used to determine the amount of compensation that must be made to the damaged party.
E) the amount of compensation that must be made to the damaged party is small.