According to Coase's theorem when property rights are well defined and legally enforceable and transactions costs are not prohibitive ?
Correct answer: B. participants will organize their transactions
- A. population growth leads to rigid land rights
- B. participants will organize their transactions
- C. violence displacement erosion and poverty are minimized
- D. individuals overuse of the biosphere is curtailed
Explanation
Coase's theorem states that with clearly defined, enforceable property rights and negligible transaction costs, affected parties can bargain and organise transactions to reach an efficient outcome. It does not specifically claim that population growth or poverty will be eliminated.
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