Scenario: A chemical factory is located upstream on a river. The factory dumps its liquid waste into the river. A microbrewery is located downstream on this river; it uses the river water in its production process and values the clean water. The chemical factory can filter its liquid waste before dumping it into the river, but it would be costly to the factory. The table below shows the profit to these two businesses under different circumstances.

-Refer to scenario above.Suppose the negotiation between the chemical factory and microbrewery is costless.What is the minimum offer that the chemical factory would be willing to accept from the microbrewery to to filter its waste?
A) $100
B) $200
C) $300
D) $400

Question

Scenario: A chemical factory is located upstream on a river. The factory dumps its liquid waste into the river. A microbrewery is located downstream on this river; it uses the river water in its production process and values the clean water. The chemical factory can filter its liquid waste before dumping it into the river, but it would be costly to the factory. The table below shows the profit to these two businesses under different circumstances.
 
-Refer to scenario above.Suppose the negotiation between the chemical factory and microbrewery is costless.What is the minimum offer that the chemical factory would be willing to accept from the microbrewery to to filter its waste?
A) $100 
B) $200 
C) $300 
D) $400

Quizplus · Accepted Answer

The Answer of Scenario: A chemical factory is located upstream on a river. The factory dumps its liquid waste into the river. A microbrewery is located downstream on this river; it uses the river water in its production process and values the clean water. The chemical factory can filter its liquid waste before dumping it into the river, but it would be costly to the factory. The table below shows the profit to these two businesses under different circumstances.
 
-Refer to scenario above.Suppose the negotiation between the chemical factory and microbrewery is costless.What is the minimum offer that the chemical factory would be willing to accept from the microbrewery to to filter its waste?
A) $100 
B) $200 
C) $300 
D) $400

Scenario: a Chemical Factory Is Located Upstream on a River