8. The effects of property rights on achieving efficiency Consider a river found in the city of Philadelphia, and then answer the questions that follow. The city has a hiking lodge whose visitors use the river for recreation. The city also has a fish cannery that dumps Industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the fish cannery's waste decreases the hiking lodge's economic profit. Suppose that the fish cannery could use a different production method that involves recycling water. This would reduce the pollution in the river to levels safe for recreation, and the hiking lodge would no longer be affected. If the fish cannery uses the recycling method, then the fish cannery's economic profit is $2,000 per week, and the hiking lodge's economic profit is $2,900 per week. If the fish cannery does not use the recycling method, then the fish cannery's economic profit is $2,700 per week, and the hiking lodge's economic profit is $1,900 per week. These figures are summarized in the following table.