a. If Smith is not liable for noise damage and there are no negotiation costs, will he install soundproofing? Explain.
b. How, if at all, would your answer differ if the negotiation costs of maintaining an agreement were $4/wk? Explain.
c. Now suppose Jones can escape the noise damage by moving to a new location, which will cost him $120/wk. With negotiation costs again assumed to be zero, how, if at all, will your answer to part (a) differ?Explain.