Two firms use a lake. The first firm uses the lake for waste disposal . The second firm uses the lake for clean water supply . Polluting the lake increases the costs of water purification. If the waste disposal firm owns property rights, what is the socially optimal pollution level? If the water supply firm owns the lake, what is the socially optimal pollution level? In both cases, e* is the optimal pollution. Both users can negotiate and set a price for discharge. The equilibrium price of pollution in competitive markets is p*. Why is p* the equilibrium price