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 resort whose visitors use the river for recreation. The city also has a chemical plant that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the chemical plant's waste decreases the resort's economic profit. levels safe for recreation, and the resort would no longer be affected. If the chemical plant uses the recycling methed the chemical plant's the chemical plant's economic profit is $2,300 per week, and the resort's economic profit is $1,600 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the chemical plant's economic profit and the resort's economic profit combined) with and without recycling. Total economic profit is highest when the recycling production method is the chemical plant's economic profit by $2,300$1,500=$800 per week. Therefore, the chemical plant should be willing to use the recy method if it is compensated with at least $800 per week. Suppose the resort has the property rights to the river. That is, the resort has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the chemical plant will the recycling method and will pay the resort per week. Now, suppose the chemical plant has the property rights to the river, including the right to pollute it. In this case, assuming the two firms can bargin at no cost, the chemical plant will the recycling method, and the resort will pay the chemical plant. per week. he chemical plant will make the most economic profit when rue or False: The chemical plant will use the recycling method, regardless of who has the property rights. True False