Javed is a writer who works from home and he lives next door to Tommen who is a drrummer in a local band. tommen needs to practice to earn his share of the band's pofits which is $300. Javed is trying to finish a piece for which he will get paid $500 but he is distracted by Tommen's drumming. What would have to be true about transaction costs in order for Tommen and Javed to be able to reach the efficient outcome. Transaction costs would need to be $0? transaction costs would need to be less than $200?

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In order for Tommen and Javed to reach an efficient outcome where both can pursue their respective a... View the full answer