Question

Mildred ane Craig are Nieghbors in Ft Lauderdale Florida. They each own a two story building. Mildred has a green house on top of her building- in this greenhouse she grows organic peppers which she sells at the local farmers market every Saturday. Each Organic pepper cosy her 0.50 cents to grow. Every sunday at the farmers Market mildred can expect to sell 100 peppers at $2 dollars a piece. Yesterday Mildred recieved a notice from the city of Ft Lauderdale informing her that constructuon was about to begin on Craigs building. Craig har upkeep and maintence expenses of $50 dollars a week, Craig expects to rent out the third story for $100 a week. Mildred is upset at the prospect of Craig adding a third story to his building because the third Story will block the sunlight which her peppers need to grow. Without sunlight, Mildred expects that on average each pepper will cost her .50 cente to grow; however the number of peppers she can sell at the farmers market for $2 dollars will fall to 40.

How can the externality be internalizer? ( Note: I want a detialed anaylsis of each actors choice calculus. And think in terms of weekly payment.)

Answer 1