# 1 bandNo bands2 bands3 bands200Bar owner100300benefits125Tenants costs75400

Question
38 views

Does the number of bands playing on a Saturday night depend on how many
tenants there are in the building? (Assume that the costs described in the table above
refer to the total costs to tenants, not the cost to each tenant.)
A. Maybe, due to possible transaction costs
B. No, since they see the owner often and it is easy to negotiate
C. Yes because it makes an agreement harder to enforce
D. No, due to the free‐rider theory

check_circle

Step 1

The number of tenants in the building will impact the number of bands played on Saturday. The reason behind the same is that as the number increases, it gets difficult to enforce the agreement as the cost of the loud music on one tenant might be different from the co...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in