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New Microsoft Word Document Design Layout References Mailings Review View HelpTell me Share Com Autosave Of File Home insert Design Layout References Mailings ReviewView Hep New Microsoft Word Document (2) 14 A A Aa- 1 Normal T No Spac.. HeadinEditing Dictate E Verdana 14 AA Aa A 2 Font Paste Styles Voice f Normal No Spac Heading Clipboard Font Paragrapr Styles Total economic profit is highest when the recycling production method is used/not used Consider a lake found in the town of Margaret River, 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 holiday destination. That is, the fish cannerys waste decreases the resorts economic profit. Imagine 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 resort When the fish cannery uses the recycling method, the resort earns $2,800-$2,000-$800$2,800-$2,000-$800 more per week than it does with no recycling. Therefore, the resort should be willing to pay up to $800 per week for the fish cannery to recycle water. However, the recycling method decreases the fish cannerys economic profit by $2,300-$1,800-$500$2,300-$1,800 $500 per week. Therefore, the fish cannery should be willing to use the recycling method if it is compensated with at least $500 per week. would no longer be affected. If the fish cannery uses the recycling method, then the fish cannerys economic profit is $1,800 per week, and the resorts economic profit is $2,800 per week. If the fish cannery does not use the recycling method, then the fish cannerys economic profit is $2,300 per week, and the resorts economic profit is $2,000 per week. Imagine the resort has the property rights to the lake. That is, the resort has the right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the fish cannery will not use/use the recycling method and will pay the resort $o/between $o-$300/between $300- $500/between $500-$800 per week These figures are summarised in the following table. Complete the following table by computing the total profit (the fish cannerys economic profit and the resorts economic profit combined) with and without recycling. Now, imagine 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 use/not use the recycling method, and the resort will pay the fish canner $o/between $0-$300/between $300- s500/between $500-$s00 per week. Profit Fish Cannery Resort Total (Dollars) (Dollars) (Dollars) 2,000 2,800 Action The resort will make the most economic profit when it has property rights to a clean lake/the fish cannery has property rights to pollute the lake No Recycling 2,300 Recycling 1,800 True or False: The fish cannery will use the recycling method only if the resort has the property rights. wB LectureWorksheets.. New Microsoft Wor... Naw Microst Wor..New folder ()Aplis Student Que. P Week 3 Lec (2)-Po.. Type here to searchWhen the fis earns $2,800 $2,000 $800 more per week than it does with no recycling Therefore, the resort should be willing to pay up to $800 per week tor the fish cannery to recycle water. However, the recycling method decreases the fish cannerys econic profit by $2,300-$1,800 $500 per week. Therefore, the fish cannery should be wlling to use the recydling method if it is compensated with at least $500 per week. h cannery uses the recycling method, the resort Consider a lake found in the town of Margaret River, and then answer the questions that follow The town has a resart whose visitors use the lake recrestion, The town also has a fish canmery that dumps industrial waste into the leke. This pollutes the lake and makes it less desrable holiday destnation. Th is,the fis cannerys waste cecreases the resorts economic profit. Imagine the resort has the property rights ta th: ake That is、tht resort tas tte right to a dean (rpallutec) lake. In this case, assuming the two me can bangain at no cost, the fich cannary wll the recycling method ard wil pay the resert y per wook. Now, imagine the fih cannery has the property rights to the lake, ircluding the rigt to pol ute it. In this case,uming the two firns can barcain at ro cost, tha sh canrcry vill he recyding nathod, and the resert wil pay the fish carnery Y par wek The resat will make the moct ecaromic preft whe Imagine that the tish cannery involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the resnrt would no longer be affected. If the fish cannery uses the recycling method, then the fish cannerys economic profit is $1,800 per weck, and the resorts cconomic profit is $2,800 per week. If the fish cannery does กot use the recycling method, then the fish cannerys economic profit is $2,300 per week, and the resorts economic profit is $2,000 per week. These figures are summarised in the following table. could use a ditte rent production method that re or False: The fsh canery wl u the recyding nothod anly E the resort hasthe property rights True Fase Complete the ig tle by computing the dotal proke the fish caneryseomic pront and the reserts ecEc prit combinedl) wih ad Fish Canaery rTotal (ooles (Dollars (oars) No Recycing,300 Recyding1,800 Tatal econsmit prent is highest when the receding roducton met。

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