Why are the net benefits of a LoJack installation in a car ...

[V@ndy87]

Why are the net benefits of a LoJack installation in a car considered to be positive for the society as a whole?

Question 2

Firms will merge or one firm will acquire another for all but which of the following reasons:
 A) one large firm has a cost advantage over two smaller firms.
  B) synergies involved between the two firms.
  C) to enter a new market.
  D) to diversify risk.
  E) one large firm can sell more than two smaller firms.

[mfedorka]

Answer to Question 1

From the community's standpoint the net benefits are positive. Ian Ayres of Yale Law School and economist Steven Levitt of the University of Chicago ran the numbers and concluded that equipping three additional cars with LoJacks (which last for the life of a car) will deter one auto theft a year in a city, most likely of an unequipped car. They found that annualized installation and service charges on a LoJack averaged about 97 per year, and the loss per stolen car (averaged over those recovered and not recovered) is approximately 4,000 . All of the cars in a city share the benefits of an additional LoJack, and those benefits are more than ten times the cost of installing and maintaining it.

Answer to Question 2

E