Truck makes a lot of noise and wakes adam

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Much to his dismay, Adam's trash gets picked up every Sunday morning at 7 AM. The trash truck makes a lot of noise and wakes Adam up, such that Adam experiences (monetized) utility losses of $20 from not being able to sleep in until his desired wake-up time of 11 AM. However, the trash company doesn't pick up the trash at 7 AM to be spiteful. Instead, it has designed its routes to minimize costs, and it would cost the company $10 more in gas and employee wages to stop by Adam's house at 11 AM rather than 7AM. How does the Coase Theorem apply to this situation, and what does it suggest will be the outcome?

Reference no: EM131728168

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