A factory that emits e units of pollution into the river obtains the total benefit from emissions, (10e - (e^2)/2)? (By polluting more, the factory incurs lower abatement costs, thus increasing its profits.) Downstream on the river is a fishery, for which the pollution kills some of the stock of fish, increasing the fishery's production costs by (2*(e^2)). Suppose that the fishery has property rights to pollute (a.k.a. property rights to prevent pollution or rights to a clean river). 1) What is the socially optimal level of emissions, e*? 2) If the factory and fishery managements are profit-maximizing (rational) agents, assuming bargaining is cost-free, what level of emissions, e, would the two agents agree to and achieve