. From an economic perspective, what is the best solution to this environmental conflict of interest? Hint: What is the optimal level of pollution? What is the optimal price of pollution? Explain how this is determined. (2 pts) The factory and the farm will bargain for an optimal solution, where marginal benefits to the factory equal marginal costs to the farmer. 450 tons of pollution will be emitted at a price of $180 per ton. b. Assume the farmer owns the property rights. (2 pts each) i. How much will the factory pay the farmer for the right to pollute? $180 * 450 tons = $81,000. ii. Calculate net benefits (benefits - costs) for the farmer. Benefits = 81,000 - MC of pollution (60, 750) = $20,250 iii. Calculate net benefits for the factory. Benefits = MB (360 * 900 - -180 * 450 = 162, 000 - 40, 500 = 121, 000) - payment to farmer (81, 000) = $40,500 iv. What is the total net gain from Coase bargaining? Without bargaining net benefit is 0. Net benefit from bargaining = 20,250 + 40,500 = $60, 750