The 'Nuts & Bolts' Factory Is Located Next to the Movie

question 125

Multiple Choice

The 'Nuts & Bolts' factory is located next to the movie set for 'The silent man'.The noise coming from the factory makes the movie production close to impossible.The factory can be sound-proofed for $2 million or it can be moved for $4 million.The movie set can be moved for $1.5 million.Assume that the movie set has the property right.What would be the optimal solution to this problem?

• A) The factory should pay for its own sound-proofing
• B) The movie producers should pay for the sound-proofing of the factory
• C) The movie producers should pay to move the movie set
• D) The factory should pay to move the movie set
• E) The factory should pay to move the factory

---

Definitions:

Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with higher elasticity indicating greater responsiveness.

Gallons

A unit of volume for liquid measure equal to four quarts, used in the US customary and British imperial systems.

Quarts

A unit of liquid volume measurement in the United States, equal to a quarter of a gallon or approximately 0.946 liters.

Price Elasticity

Measures how the quantity demanded of a good responds to a change in price, indicating the sensitivity of demand to price changes.