Economics · Environmental Economics
In the presence of externality, the Coase theorem argues that:
- 1Property rights cannot be assigned to any party
- 2Income effect and transaction costs are to be considered always
- 3Social optimum can also be attained by mutual agreement between the private parties✓
- 4Social optimum can be attained only through government's intervention
Correct answer
Social optimum can also be attained by mutual agreement between the private parties
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