This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Value of Mill Value of Fishery High Discharge Rate $3000 $2000 Low Discharge Rate $1000 $6000 3. The social optimum is ____ discharge because_______. A. High, Because the mill loses $2000 if discharge is low. B. High, Because the Fishery could not compensate the Mill from losses due to low discharge. C. Low, Because the total value of Mill and Fishery is greater for low than for high discharge. ** D. Low, Because the Fishery could not compensate the Mill from losses due to low discharge. 4. If the Mill has the right to pollute as much as it wants and bargaining is not costly then A. The Fishery will pay the Mill something over $2000 to switch to low discharge. ** B. The Fishery will not be able to reach a bargain resulting in low discharge. C. The Fishery will go out of business because of pollution. D. The Fishery will pay the Mill something over $4000 to switch to low discharge....
View Full
Document
 Spring '07
 BALABAN
 Economics, Perfect Competition

Click to edit the document details