ECONOMICS

Coase Theory



Coase Theory

When it comes to the Coase theorem it can be said that when there are no transactional costs the volume of the goods and services that were produced in an industry whereby the externalities also exist but it is said to be independent when it comes to the parties regardless of which part perpetuates externalities that are negative by nature and which part will bare the costs (www.investopedia.com). The distribution of income is said to be dependent on the liability of the perpetuator. In order to understand the relative significance of the theory of Coase in relation ...