What is the socially optimum level of practice for the band

Reference no: EM13214289

Gina was in a garage band when she was in high school, and the only time they could find to practice was on Saturday morning (much to the dismay of her neighbors.) Suppose the band received $49 in internal benefit (i.e., happiness) from practicing for the first hour, and this amount decreases by $10 per hour, each hour thereafter (i.e., $39, $29, etc.). Suppose also that the neighbors have a constant total cost (in terms of the sum of their collective irritation) of $20 worth of distress for each hour of practice.

A) Will Coase bargaining be useful in such a situation? Explain.

B) Left to their our own devices (i.e., without any parental or society intervention,) how long did Gina's garage band practice every Saturday morning? Provide your rationale.

C) What is the socially optimum level of practice for the band?

Reference no: EM13214289

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