Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars)for the three parties are listed below.
When Erie Textiles operates without a filter, the total gain (in thousands of dollars)to all three parties is ________.
A)$985
B)$325
C)$510
D)$475

Question

Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars)for the three parties are listed below.  
 When Erie Textiles operates without a filter, the total gain (in thousands of dollars)to all three parties is ________.
A)$985 
B)$325 
C)$510 
D)$475

Quizplus · Accepted Answer

Erie's benefits are $400, the fishermen's are $50 and the bird watchers' are $25.

Suppose Erie Textiles Can Dispose of Its Waste "For Free