Suppose a smoke-emitting factory covers a nearby country club's tennis courts with soot, requiring court reconditioning and resurfacing costing $4,000 per year. Washing the tennis courts each day to avoid reconditioning and resurfacing would cost $5,600 per year to remedy the problem. Alternatively, a smokestack filter would cost $3,000 and last about nine years.
a. What is the efficient solution to the problem?
b. What should the factory do if the country club is granted a legal right to soot-free tennis courts? Explain.

Question

Quizplus · Accepted Answer

The Answer is a. The efficient solution to the problem would be for the factory to install the smokestack filter. This is because the cost of the filter, at $3,000, is lower than the cost of either reconditioning and resurfacing the tennis courts at $4,000 per year or washing the courts daily at $5,600 per year. Additionally, the filter would last for nine years, providing a long-term solution to the problem.

b. If the country club is granted a legal right to soot-free tennis courts, the factory should still install the smokestack filter. This is because it is the most cost-effective solution in the long run, and it would also ensure that the country club's legal right to soot-free tennis courts is upheld. By installing the filter, the factory would be taking proactive measures to prevent soot from affecting the tennis courts, thereby fulfilling their legal obligation to the country club.

Suppose a Smoke-Emitting Factory Covers a Nearby Country Club's Tennis