What Conditions Must Be Met for Private Bargaining to Be

Multiple Choice

What conditions must be met for private bargaining to be effective in resolving an externality?

A) Bargaining costs must be low, and property rights must be clear.
B) Property rights must be clear, and production must begin at a socially optimal level.
C) There must be trade in public goods.
D) Taxes must be low, and regulations must be minimal.