Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Considera take found in the town of Center Barnstead, and then answer the questions that follow The town has a resort whose visitors use the

image text in transcribed
Considera take found in the town of Center Barnstead, and then answer the questions that follow The town has a resort 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 fich cannesys waste decreases the resort's economic pret Suppose that the scannery could use aferent production method that involves recycling watet. This would reduce the pollution in the leto levels safe for recreation, and the resort would no longer be affected. the fish canneryhoding method, then the fish cantry's economic profit is $1.400 per week, and the resort's economic profits $2,700 per week of the cannery does not thereyding method, then the fan Cannery's crome prolts $2,200 per week, and the resort's economic profit is $1,500 per week. These figures we summarized in the following table Complete the following table by computing the total profit (the fut cas economic profile and the morts ecocok profit combined with and without recycling Fish Cannery (Dollar) 2,200 1,400 Action No Recycling Recycling Profit Resort (Dollars) 1,500 Total (Dollars) 2.700 Total economic profit is highest when the recycling production methods When the scannery ves the recycling method, the resort cam 52.700 - 51.500 - $1,200 now that does with no recycling Therefore, the resort should be willing to pay up to $1,200 per week for the carnery to recyewe Hthe recycling method decreases the fish camney's economic profit by 52,200 - 51,400 5800 per week. Therefore, the camery should be willing to use the recycling method i compensated with east 800 per week Suppose the resort has the property rights to the lake. That is the resort has the new polied. In this case, uning the two firma ca bargain at no cost the fish cannery will the recycling method and will pay the resort week Now, wuppose the rich cannery has the property is to the coing the right to put in the firms can baran no cost the fish cannery will the recycling method, and there will pay they The resort will make the most economic profit when Truter role: The ton cannery well with the reading method only the resort has the property The

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Systems Exam Questions And Explanations

Authors: Irvin N. Gleim, William A Hillison

18th Edition

1581943016, 978-1581943016

More Books

Students also viewed these Accounting questions

Question

Address an envelope properly.

Answered: 1 week ago

Question

Discuss guidelines for ethical business communication.

Answered: 1 week ago