8.) In the situation depicted below, explain clearly:

A.Which users (upstream or downstream) should get the property right (allowing them to have their interests protected) according to Coase's "theorem"?

B.Which property right (full liability or no liability) is more socially efficient?

C.Would a change from full liability to no liability be a Pareto improvement?

D.Indicate in the graph the "net benefit" to society of a switch from full liability to no liability (be careful to label or indicate this answer clearly).

\f