Answering Exams

The Coase theorem states that ?

The Coase theorem states that ?

A. public goods should be produced up to the point where the additional benefit received by society equals the additional cost of producing the good
B. under certain conditions, private parties can arrive at the efficient solution without government involvement (Correct)
C. the private sector will fail to produce the efficient amount of a public good because of the free-rider problem.
D. if there are external costs in production the government must intervene in the market to assure that the efficient level of output is produced

 

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