Economics · Microeconomics
According to the Coase Theorem, efficient solutions to externalities can be reached through private bargaining under which condition?
- 1Clearly defined property rights and zero transaction costs.✓
- 2Assigning property rights solely to legal state institutions.
- 3Government intervention setting pigouvian tax rates.
- 4Providing exclusive property rights to labor unions.
Correct answer
Clearly defined property rights and zero transaction costs.
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