Question
Monica and Joey live in the same apartment building where Joey practices his acting so loudly that Monica can hear him. Monica does not like
Monica and Joey live in the same apartment building where Joey practices his acting so loudly that Monica can hear him. Monica does not like Joey's acting. Joey receives a $150 total benefit from acting and Monica faces $90 worth of damages from hearing it.
(a) From an efficiency standpoint, should Joey be allowed to practice his acting?
(b) If the apartment doesn't have rules about noise, and Joey and Monica can bargain at no cost, will they reach an agreement where Joey practices acting somewhere else?
(c) If the apartment has a rule that residents can't be too loud if their neighbor objects, and there is no bargaining costs, will Joey be allowed to practice acting?
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