Y7

plant's proposed site is the Balistreri Winery. The pollution from the plant affects the productivity of Balistreri's vineyard and thus affects their profitability. Below is the profits for each group under different power plant types: Gains to: No Plant Nat. Gas Plant Coal Plant Xcel $0/yr $310m/yr $320m/yr Balistreri $80m/yr $40m/yr $15m/yr a) If Xcel has the right to pollute and negotiations between the two firms are costless, what would be the expected outcome? Please explain your answer. b) In reality why might the two sides fail to reach the outcomes you describe above