The Coase Theorem States That

Multiple Choice

The Coase theorem states that

A) the level of pollution should be equal to zero to maximize social net benefit.
B) profit making producers pollute because they are forced to.
C) the efficient level of output is where marginal external cost equals marginal external benefit.
D) if property rights exist and transactions costs are low, private transactions are efficient.
E) the best way to limit pollution is by taxing producers who pollute.