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ECON 471 (4)
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Lecture

Econ371_practice_sols_q3.pdf

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Department
Economics
Course
ECON 471
Professor
All Professors
Semester
Summer

Description
3aTheconfectionerhasthreeoptionsiceasemakingnoiseanincuracostof120iicontinuetomakenoiseandhavetopay180incompensationtothedoctororiiiinstallthenoisesoundproongdeviceatacostof60SinceoptioniiiistheconfectionerslowestcostoptiontheconfectionerwouldinstallthesoundproongdeviceInthiscasethereisnoreasonforthedoctorandconfectionertobargainThisistheecientoutcomebThedoctorwillbargainwithconfectionerandoertopayhimtoeliminatethenoiseThelargestpaymentthedoctorwouldbewillingtooerwouldbe180whichisthevaluetothedoctorofanoisefreeenvironmentThesmallestpaymentacceptabletotheconfectionerwouldbe60whichisthecostofthesoundproongdeviceSointhiscaseitislikelythatthedoctorwouldpaytheconfectionerp
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