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When the fish processor uses the recycling method, the kayak rental earns $2,600 - $1,500 = $1,100 more per week than it does with no

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When the fish processor uses the recycling method, the kayak rental earns $2,600 - $1,500 = $1,100 more per week than it does with no recycling. Therefore, the kayak rental should be willing to pay up to $1,100 per week for the fish processor to recycle water. However, the recycling method decreases the fish processor's economic profit by $1,700 - $1,000 = $700 per week. Therefore, the fish processor should be willing to use the recycling method if it is compensated with at least $700 per week. Suppose the kayak rental has the property rights to the river. That is, the kayak rental has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the fish processor will the recycling method and will pay the kayak rental per week. Now, suppose the fish processor has the property rights to the river, including the right to pollute it. In this case, assuming the two firms can bargain at no cost, the fish processor will the recycling method, and the kayak rental will pay the fish processor per week. The kayak rental will make the most economic profit when True or False: The fish processor will use the recycling method, regardless of who has the property rights. O True O False

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