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The Coase theory suggests that private markets may not be able to solve the problem of externalities

a. when the number of interested parties is large and bargaining costs are high
b. if government does not actively become involved in the process
c. if the firm in the market is a monopoly
d. if some people benefit from the externality

Respuesta :

Answer: A. When the number of interested parties is large and bargaining costs are high.

Explanation:

The Coase Theorem is a legal and economical theory used to describe competitive markets. When the competitive markets are high, bargaining costs are high because each company is is fighting for use of the production and distribution channels. There are efficient input and output levels in a competitive market.

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