Bob lives in a residential neighbourhood that takes pride on well-groomed lawns.Bob's neighbours find that the marginal benefit of someone else's well-groomed lawn is $10.Bob,however,receives the same net benefit from an unkempt lawn as a well-groomed lawn: zero (an unkempt lawn looks bad but costs nothing;a well groomed lawn looks nice but is costly).
-Refer to the information above.Suppose that Bob knows that his neighbours value his lawn being well groomed more than he does and demands $15 from them.The neighbours will

Question

Bob lives in a residential neighbourhood that takes pride on well-groomed lawns.Bob's neighbours find that the marginal benefit of someone else's well-groomed lawn is $10.Bob,however,receives the same net benefit from an unkempt lawn as a well-groomed lawn: zero (an unkempt lawn looks bad but costs nothing;a well groomed lawn looks nice but is costly). 
-Refer to the information above.Suppose that Bob knows that his neighbours value his lawn being well groomed more than he does and demands $15 from them.The neighbours will

Quizplus · Accepted Answer

Bob's neighbours value his lawn being well groomed more than he does, so they are willing to pay him to keep it that way. However, they are not willing to pay him $15, which is more than he values the service. Therefore, they will offer him a lower amount, such as $9.

Bob Lives in a Residential Neighbourhood That Takes Pride on Well-Groomed