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Kelly and Jennifer are roommates. Kelly loves listening to rock music and uses the radio in their common area to play it. Jennifer, on the other hand, prefers the peace and quiet around the common area.
Answer the following questions given the following information:
1. Suppose the landlord tries the resolve Kelly and Jennifer's situation by giving Kelly the right to play rock music in the common area. The value of listening to rock music to Kelly is Php800 while the value of peace and quiet to Jennifer is Php900.
a What is the socially efficient outcome?
b Based on your answer in (1.a), what best describes the negotiation between Kelly and Jennifer?
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