$15
(a) if the company can ignore the negative externalities imposed on neighbors, where would they choose to locate?
(b) is this economically efficient?
(c) if each neighborhood can successfully block the factory’s location plans (and bargaining is costless), where would you expect the factory to locate?
(d) using the single-owner principle, what is the optimal location?
(e) Do you
agree with
answers (c) and (d)? Explain why
I’ve struggled with this problem. Please help me.
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