According to the Coase Theorem, Externality Problems

Multiple Choice

According to the Coase theorem, externality problems

A) do not exist in reality, because all costs and benefits are internal to firms.
B) can be solved through private negotiations without the need for government intervention.
C) must only be resolved by government action, through either taxes or subsidies.
D) can never be resolved adequately, because one party always gains while the other loses.