Suppose the factory can pollute but the resorts are entitled to damages (payment) for any harms...

 

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Suppose the factory can pollute but the resorts are entitled to damages (payment) for any harms caused by the factory's pollution on the lake. If the factory and the resorts can bargain with zero transaction costs, describe the bargain that will occur (if any). To answer this, provide the willingness to pay (WTP) and willingness to accept (WTA) for the possible transaction, and why a transaction will or will not occur using those numbers. What will be the outcome after bargaining? Suppose the factory can pollute but the resorts are entitled to damages (payment) for any harms caused by the factory's pollution on the lake. If the factory and the resorts can bargain with zero transaction costs, describe the bargain that will occur (if any). To answer this, provide the willingness to pay (WTP) and willingness to accept (WTA) for the possible transaction, and why a transaction will or will not occur using those numbers. What will be the outcome after bargaining?

Answer rating: 100% (QA)

In this scenario the factory can pollute the lake causing harm to the resorts which are entitled to ... View the full answer