Problem 3. Company X's factory makes noise that would cost $6000 to quieten. The noise causes company Y next door to lose $8000 in productivity and it would cost company Y $7700 to install...

Problem 3. Company X's factory makes noise that would cost $6000 to quieten. The noise<br>causes company Y next door to lose $8000 in productivity and it would cost company Y $7700<br>to install noise-proofing that would shut out the noise. Transactions costs are high.<br>a) True or False? Under no liability, Company Y will install the noise-proofing.<br>b) True or False? Under strict liability, Company X will pay to prevent the noise.<br>c) What is the efficient solution to the noise problem (should it be quietened and by who)?<br>

Extracted text: Problem 3. Company X's factory makes noise that would cost $6000 to quieten. The noise causes company Y next door to lose $8000 in productivity and it would cost company Y $7700 to install noise-proofing that would shut out the noise. Transactions costs are high. a) True or False? Under no liability, Company Y will install the noise-proofing. b) True or False? Under strict liability, Company X will pay to prevent the noise. c) What is the efficient solution to the noise problem (should it be quietened and by who)?

Jun 06, 2022

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Problem 3. Company X's factory makes noise that would cost $6000 to quieten. The noise causes company Y next door to lose $8000 in productivity and it would cost company Y $7700 to install...

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