The Coase Theorem Implies That

Multiple Choice

The Coase theorem implies that:

A) private individuals will not produce the socially optimal outcome because bargaining costs are generally quite high.
B) given low bargaining costs, private individuals can achieve a socially optimal solution without the involvement of the government.
C) given external costs, the government must intervene to achieve the socially optimal output.
D) all goods that generate an external cost (or benefit) should be produced up to the point where the marginal social benefit equals the marginal social cost of the good.