What does the Coase theorem state?

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

Answer checked 11 October 2026 · How we write and check questions