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 chemical lab that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the chemical lab's waste decreases the kayak rental's economic profit. Suppose that the chemical lab 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 chemical lab uses the recycling method, then the chemical lab's economic profit is $2,100 per week, and the kayak rental's economic profit is $2,500 per week. If the chemical lab does not use the recycling method, then the chemical lab's economic profit is $2,500 per week, and the kayak rental's economic profit is $1,800 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the chemical lab's economic profit and the kayak rental's economic profit combined) with and without recycling. Action No Recycling Recycling Chemical Lab (Dollars) 2,500 2,100 Profit Kayak Rental (Dollars) 1,800 2,500 Total (Dollars) 4,300 4,600 Total economic profit is highest when the recycling production method is used When the chemical lab uses the recycling method, the kayak rental earns $2,500 $1,800 = $700 more per week than it does with no recycling. Therefore, the kayak rental should be willing to pay up to $700 per week for the chemical lab to recycle water. However, the recycling method decreases the chemical lab's economic profit by $2,500 $2,100 = $400 per week. Therefore, the chemical lab should be willing to use the recycling method if it is compensated with at least $400 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 chemical lab will the recycling method and will pay the kayak rental per week. Now, suppose the chemical lab 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 chemical lab will the recycling method, and the kayak rental will pay the chemical lab week. per The kayak rental will make the most economic profit when True or False: The chemical lab will use the recycling method, regardless of who has the property rights. True O False