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Complete the following table by computing the total profit (the research facility's economic profit and the water park's economic profit combined) with and without recycling. Action No Recycling Recycling Research Facility (Dollars) 2,100 1,600 Profit Water Park (Dollars) 1,300 2,100 Total (Dollars) Total economic profit is highest when the recycling production method is When the research facility uses the recycling method, the water park earns $2,100 - $1,300 = $800 more per week than it does with no recycling. Therefore, the water park should be willing to pay up to $800 per week for the research facility to recycle water. However, the recycling method decreases the research facility's economic profit by $2,100 - $1,600 = $500 per week. Therefore, the research facility should be willing to use the recycling method if it is compensated with at least $500 per week. Suppose the water park has the property rights to the river. That is, the water park has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the research facility will the recycling method and will pay the water park ▼per week. Now, suppose the research facility 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 research facility will the recycling method, and the water park will pay the research facility per week. The water park will make the most economic profit when

Complete the following table by computing the total profit (the research facility's economic profit and the water park's economic profit combined) with and without recycling. Action No Recycling Recycling Research Facility (Dollars) 2,100 1,600 Profit Water Park (Dollars) 1,300 2,100 Total (Dollars) Total economic profit is highest when the recycling production method is When the research facility uses the recycling method, the water park earns $2,100 - $1,300 = $800 more per week than it does with no recycling. Therefore, the water park should be willing to pay up to $800 per week for the research facility to recycle water. However, the recycling method decreases the research facility's economic profit by $2,100 - $1,600 = $500 per week. Therefore, the research facility should be willing to use the recycling method if it is compensated with at least $500 per week. Suppose the water park has the property rights to the river. That is, the water park has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the research facility will the recycling method and will pay the water park ▼per week. Now, suppose the research facility 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 research facility will the recycling method, and the water park will pay the research facility per week. The water park will make the most economic profit when

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Complete the following table by computing the total profit (the research facility's economic profit and the water park's economic profit combined) with and without recycling. Action No Recycling Recycling Research Facility (Dollars) 2,100 1,600 Profit Water Park (Dollars) 1,300 2,100 Total (Dollars) Total economic profit is highest when the recycling production method is When the research facility uses the recycling method, the water park earns $2,100 - $1,300 $800 more per week than it does with no recycling. Therefore, the water park should be willing to pay up to $800 per week for the research facility to recycle water. However, the recycling method decreases the research facility's economic profit by $2,100 - $1,600 = $500 per week. Therefore, the research facility should be willing to use the recycling method if it is compensated with at least $500 per week. Suppose the water park has the property rights to the river. That is, the water park has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the research facility will the recycling method and will pay the water park per week. Now, suppose the research facility 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 research facility will the recycling method, and the water park will pay the research facility ▼per week. The water park will make the most economic profit when
Transcribed Image Text:Complete the following table by computing the total profit (the research facility's economic profit and the water park's economic profit combined) with and without recycling. Action No Recycling Recycling Research Facility (Dollars) 2,100 1,600 Profit Water Park (Dollars) 1,300 2,100 Total (Dollars) Total economic profit is highest when the recycling production method is When the research facility uses the recycling method, the water park earns $2,100 - $1,300 $800 more per week than it does with no recycling. Therefore, the water park should be willing to pay up to $800 per week for the research facility to recycle water. However, the recycling method decreases the research facility's economic profit by $2,100 - $1,600 = $500 per week. Therefore, the research facility should be willing to use the recycling method if it is compensated with at least $500 per week. Suppose the water park has the property rights to the river. That is, the water park has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the research facility will the recycling method and will pay the water park per week. Now, suppose the research facility 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 research facility will the recycling method, and the water park will pay the research facility ▼per week. The water park will make the most economic profit when
Consider a river found in the city of Pittsburgh, and then answer the questions that follow. The city has a water park whose visitors use the river for recreation. The city also has a research facility that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the research facility's waste decreases the water park's economic profit. Suppose that the research facility 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 water park would no longer be affected. If the research facility uses the recycling method, then the research facility's economic profit is $1,600 per week, and the water park's economic profit is $2,100 per week. If the research facility does not use the recycling method, then the research facility's economic profit is $2,100 per week, and the water park's economic profit is $1,300 per week. These figures are summarized in the following table.
Transcribed Image Text:Consider a river found in the city of Pittsburgh, and then answer the questions that follow. The city has a water park whose visitors use the river for recreation. The city also has a research facility that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the research facility's waste decreases the water park's economic profit. Suppose that the research facility 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 water park would no longer be affected. If the research facility uses the recycling method, then the research facility's economic profit is $1,600 per week, and the water park's economic profit is $2,100 per week. If the research facility does not use the recycling method, then the research facility's economic profit is $2,100 per week, and the water park's economic profit is $1,300 per week. These figures are summarized in the following table.
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