Ask Question
5 July, 07:52

The Coase theorem states that

a. in the absence of transaction costs, private parties can solve the problem of externalities on their own.

b. subsidies are an efficient way for governments to remedy positive externalities.

c. industrial policies encourage technology spillovers.

d. taxes are an efficient way for governments to remedy negative externalities.

+3
Answers (1)
  1. 5 July, 08:15
    0
    a. in the absence of transaction costs, private parties can solve the problem of externalities on their own.

    Explanation:

    The Coase Theorem is a theorom used in economics that states that when there are complete competetive markets with no transaction costs, an efficient set of inputs and outputs to and from production-optimal distribution will be selected. It is a method of tackling the inefficiency caused by the externality by awarding property rights to the externality to one party and allowing the other parties to bargain their way to an efficient solution.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The Coase theorem states that a. in the absence of transaction costs, private parties can solve the problem of externalities on their own. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers