The Coase Theorem States That

Multiple Choice

The Coase theorem states that

A) the private sector will fail to produce the efficient amount of a public good because of the free-rider problem.
B) under certain conditions, private parties can arrive at the efficient solution without government involvement.
C) if there are external costs in production, the government must intervene in the market to assure that the efficient level of output is produced.
D) public goods should be produced up to the point where the additional benefit received by society equals the additional cost of producing the good.