A Metal-Stamping Factory Moves Next to a Day Care Center

question 11

Multiple Choice

A metal-stamping factory moves next to a day care center.Noise from the factory makes it impossible for the kids to nap.It would cost the factory $5 million to move; it would cost $1 million for the day care center to move.Sound insulation for the factory costs $1 million; insulation for the day care center costs $200, 000.The court determines that the day care center has the property right.What would be the optimal solution to this problem?

• A)The factory should install sound insulation because that is cheaper than moving.
• B)The factory should pay the day care center to move.
• C)The factory should buy insulation for the day care center.
• D)The day care center should buy its own insulation.
• E)The day care center should move.

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Definitions:

Dell Computer

An American multinational technology company that develops, sells, repairs, and supports computers and related products and services.

Enhancing Product

Activities or modifications aimed at improving a product’s appeal, functionality, or market competitiveness.

Form Utility

Form utility refers to the value added to goods through the manufacturing process, transforming raw materials into finished products that are more desirable to consumers.

Appealing To Buyers

Strategies used by companies to attract and persuade potential customers to purchase their products or services.