The Coase Theorem Posits That Externality Problems Can Be Solved

Multiple Choice

The Coase theorem posits that externality problems can be solved without government intervention

A) when transaction costs are low and property rights are clearly defined.
B) when trading in tradeable allowances occurs.
C) if markets can reach the efficient quantity and if transaction costs exceed the deadweight loss caused in the market.
D) only rarely, that in general markets cannot maximize social surplus.