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New Microsoft Word Document Design Layout References Mailings Review View HelpTell me Share Com Autosave Of File Home insert Design Layout References Mailings ReviewView Hep New Microsoft Word Document (2) 14 A A Aa- 1 Normal T No Spac.. HeadinEditing Dictate E Verdana 14 AA Aa A 2 Font Paste Styles Voice f Normal No Spac Heading Clipboard Font Paragrapr Styles Total economic profit is highest when the recycling production method is used/not used Consider a lake found in the town of Margaret River, and then answer the questions that follow. The town has a resort whose visitors use the lake for recreation. The town also has a fish cannery that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable holiday destination. That is, the fish cannery's waste decreases the resort's economic profit. Imagine that the fish cannery could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the resort When the fish cannery uses the recycling method, the resort earns $2,800-$2,000-$800$2,800-$2,000-$800 more per week than it does with no recycling. Therefore, the resort should be willing to pay up to $800 per week for the fish cannery to recycle water. However, the recycling method decreases the fish cannery's economic profit by $2,300-$1,800-$500$2,300-$1,800 $500 per week. Therefore, the fish cannery should be willing to use the recycling method if it is compensated with at least $500 per week. would no longer be affected. If the fish cannery uses the recycling method, then the fish cannery's economic profit is $1,800 per week, and the resort's economic profit is $2,800 per week. If the fish cannery does not use the recycling method, then the fish cannery's economic profit is $2,300 per week, and the resort's economic profit is $2,000 per week. Imagine the resort has the property rights to the lake. That is, the resort has the right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the fish cannery will not use/use the recycling method and will pay the resort $o/between $o-$300/between $300- $500/between $500-$800 per week These figures are summarised in the following table. Complete the following table by computing the total profit (the fish cannery's economic profit and the resort's economic profit combined) with and without recycling. Now, imagine the fish cannery has the property rights to the lake, including the right to pollute it. In this case, assuming the two firms can bargain at no cost, the fish cannery will use/not use the recycling method, and the resort will pay the fish canner $o/between $0-$300/between $300- s500/between $500-$s00 per week. Profit Fish Cannery Resort Total (Dollars) (Dollars) (Dollars) 2,000 2,800 Action The resort will make the most economic profit when it has property rights to a clean lake/the fish cannery has property rights to pollute the lake No Recycling 2,300 Recycling 1,800 True or False: The fish cannery will use the recycling method only if the resort has the property rights. wB LectureWorksheets.. New Microsoft Wor... Naw Microst Wor..New folder ()Aplis Student Que. P Week 3 Lec (2)-Po.. Type here to search

Answer 1