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Unformatted text preview: The fishery has profits = 112.5. The chemical company has profits = 125. D. X = 5. Thus, the chemical company will sell 3 of its 8 permits to the fishery. P* = 6 again. Now the fishery has profits = 64.5. The chemical company has profits = 173. Because the property rights are now allocated in favor of the chemical company, the chemical company makes higher profits and the fishery makes lower profits. 1...
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- Winter '08
- Deadweight Loss