Are the street musicians imposing a negative or positive externality on the law firm and other employees in the area? To people and tourists walking by? To any other group not mentioned here? Economic theory suggests that in a private market, public goods will be under-produced. Does street music satisfy the characteristics of a public good? If so, why might some (i.e. the law firm) believe there is too much of it?
Scenario
DC street band, Spread Love, plays regularly on the corner of 15th St. and New York Ave, situated nicely in the heart of DC’s tourist district, near Lafayette Square and the White House. Employees in the nearby offices complain that the band is a nuisance and the noise distracts them from their work. Some offices and conference rooms in the buildings have been rendered unusable due to the noise. Employees have been forced to work wearing headphones or have brought in white-noise machines to drown out the music. The nearby law firm contacted the Secret Service and the DC police. However, the police determined that the band’s performances were legal.
Question
Are the street musicians imposing a negative or positive externality on the law firm and other employees in the area? To people and tourists walking by? To any other group not mentioned here?
Economic theory suggests that in a private market, public goods will be under-produced. Does street music satisfy the characteristics of a public good? If so, why might some (i.e. the law firm) believe there is too much of it?
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