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 the 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 (in thousands of dollars)and losses for the three parties are listed below. $$\begin{array} { l r c }
& \text { With Filter } & \text { Without } \
\text { Gains to Erie } & \$ 200 & \$ 400 \
\text { Fishermen } & \$ 180 & \$ 50 \
\text { Bird Watchers } & \$ 130 & \$ 25
\end{array}$$
Refer to the information given above.The daily cost (in thousands of dollars)of the filter to Erie Textiles is _______,and the daily net benefit (in thousands of dollars)of the filter to the fishermen and bird watchers is _______.
A)$400;$310
B)$310;$200
C)$200;$75
D)$200;$235

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 the 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 (in thousands of dollars)and losses for the three parties are listed below. $$\begin{array} { l r c } 
& \text { With Filter } & \text { Without } \
\text { Gains to Erie } & \$ 200 & \$ 400 \
\text { Fishermen } & \$ 180 & \$ 50 \
\text { Bird Watchers } & \$ 130 & \$ 25
\end{array}$$
Refer to the information given above.The daily cost (in thousands of dollars)of the filter to Erie Textiles is _______,and the daily net benefit (in thousands of dollars)of the filter to the fishermen and bird watchers is _______.
A)$400;$310
B)$310;$200
C)$200;$75
D)$200;$235

Quizplus · Accepted Answer

The cost of the filter to Erie Textiles is the difference in gains with and without the filter, which is $400 - $200 = $200. The net benefit to fishermen and bird watchers is the sum of their gains with the filter minus their gains without it, which is ($180 + $130) - ($50 + $25) = $235.

Suppose Erie Textiles Can Dispose of Its Waste "For Free