According to the Coase theorem, private parties can solve the problem of externalities if?
Athe party affected by the externality has the initial property right to be left alone.
Bthere are no transaction costs.
Ceach affected party has equal power in the negotiations.
Dthe government requires them to negotiate with each other
EThere are a large number of affected parties.
Correct answer
B. there are no transaction costs.
Explanation
The correct answer is there are no transaction costs..