1 not usedused 2 Usednot used 30between 0 400between 400 80

Solution

The economic profit is highest when the recycling production method is used.

Suppose the campground has the property rights to the lake.In this case,assuming the two firms can bargain at no cost,the tannery will use the recycling method and will pay the campground $0 per week.

Now suppose the tannery has property rights to the river.In this case assuming the two firms can bargain at no cost,the tannery will not use the recycling method and the campground will pay the tannery between $800 and $1200 per week.(The numbers in the paragraph above in the question.)

The tannery will make the most economic profit when it has property rights to a clean lake.

True or False-

The river will remain polluted regardless of whoever has the property rights.

The statement is False.