B8 linktoMind X [@ cheggcom/t x Q ECON202EX x [ Studocu-Fre X 3% MindTap-Cc % [@ cheggcom/t X [@ cheggcom/h % c 2% hitps/g.cengage.com/staticb/ui/evo/index html?deploymentld=61182124887820137801783512538:elSBN=9781778411816&id=19899812808nbld=3804292... o 0 a & Relaunch to update 22 CENGAGE | MINDTAP Assignment # 7 (CH 10) Consider a lake found in the town of Winnipeg, and then answer the guestions that follow. The town has a campground 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 vacation destination. That is, the fish cannery's waste decreases the campground'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 lake to levels safe for recreation, and the campground would no longer be affected. If the fish cannery uses the recycling method, then the fish cannery's economic profit is $1,400 per week, and the campground's economic profit is $2,700 per week. If the fish cannery does not use the recycling method, then the fish cannery's economic profit is $2,200 per week, and the campground's economic profit is $1,500 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the fish cannery's economic profit and the campground's economic profit combined) with and without recycling. Profit e TR @ cheggcom/i X % Supposethe X+ - a Q search this course 0o x (R Y] 2024-03-06 e v B inktoMind x [@ cheggcom x Q EcoN202EBr X [ Studocu-Fre X 2% MindTap-- X [@ cheggcom/t X [@ cheggcom/h X [@ chegg.com/t X 0% Supposethe X + & X 7. CENGAGE | MINDTAP Q search this course o Assignment # 7 (CH 10) o X , Profit - Fish Cannery Campground Total Action (Dollars) (Dollars) (Doliars) No Recycling 2,200 1,500 ] . = Recycling 1,400 2,700 ] Total economic profit is highest when the recycling production method is v . . When the fish cannery uses the recycling method, the campground earns $2,700 $1,500 = $1,200 more per week than it does with no recycling. [l}: Therefore, the campground should be willing to pay up to $1,200 per week for the fish cannery to recycle water. However, the recycling method o decreases the fish cannery's economic profit by $2,200 $1,400 = $800 per week. Therefore, the fish cannery should be willing to use the recycling method if it is compensated with at least $800 per week. I:_, Suppose the campground has the property rights to the lake. That is, the campground has the right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the fish cannery will the recycling method and will pay the campground W per week. Now, suppose 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 W the recycling method, and the campground will pay the fish cannery per i = week. O The fish cannery will make the most economic profit when v True or False: The lzke will remain polluted, regardless of who has the property rights. O True O False - 10:09 PM } PLrZ RN