Complete the following table by computing the total profit (the fish processor's economic profit and the kayak rental's economic profit combined) with and without recycling. Profit Fish Processor Kayak Rental Total Action (Dollars) (Dollars) (Dollars) No Recycling Recycling 2,400 1,100 2,100 1,900 Total economic profit is highest when the recycling production method is When the fish processor uses the recycling method, the kayak rental earns $1,900 $1,100 = $800 more per week than it does with no recycling. Therefore, the kayak rental should be willing to pay up to $800 per week for the fish processor to recycle water. However, the recycling method decreases the fish processor's economic profit by $2,400 - $2,100 = $300 per week. Therefore, the fish processor should be willing to use the recycling method if it is compensated with at least $300 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 river will remain polluted, regardless of who has the property rights. True False 8. The effects of property rights on achieving efficiency Consider a river found in the city of Pittsburgh, and then answer the questions that follow. The city has a kayak rental whose visitors use the river for recreation. The city also has a fish processor that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the fish processor's waste decreases the kayak rental's economic profit. Suppose that the fish processor could use a different production method that involves recycling water. This would reduce the pollution in the river to levels safe for recreation, and the kayak rental would no longer be affected. If the fish processor uses the recycling method, then the fish processor's economic profit is $2,100 per week, and the kayak rental's economic profit is $1,900 per week. If the fish processor does not use the recycling method, then the fish processor's economic profit is $2,400 per week, and the kayak rental's economic profit is $1,100 per week. These figures are summarized in the following table.