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(T/F) If the assumptions of the Coase Theorem are satisfied, private markets will solve the problem...

(T/F) If the assumptions of the Coase Theorem are satisfied, private markets will

solve the problem of externalities without the need for command and control

regulations or taxes.

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There are conditions for the success of Coase therom. This includes the existence well defined property rights that are enforceable as well as transferable, and negligible transaction and bargaining cost. When these conditions are present in the market, the market participants can privately negotiate for the socially efficient outcome without the direct involvement of the government through subsidies or taxes.

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