Consider the following scenario when answering the following questions:
Jones owns a factory that is dumping toxic waste into a river where Smith owns a resort.At present,Jones is not filtering the water that he dumps into the river.There is a filter he could install that would remove a significant amount of the toxic elements from the water before it is dumped in the river.Jones and Smith have each assessed the situation and come up with the following data:

-If property rights over the river are assigned to Jones,then

Question

Consider the following scenario when answering the following questions:
Jones owns a factory that is dumping toxic waste into a river where Smith owns a resort.At present,Jones is not filtering the water that he dumps into the river.There is a filter he could install that would remove a significant amount of the toxic elements from the water before it is dumped in the river.Jones and Smith have each assessed the situation and come up with the following data:
 
-If property rights over the river are assigned to Jones,then

Quizplus · Accepted Answer

If property rights over the river are assigned to Jones, then he has a legal right to dump toxic waste into the river. Smith, who owns the resort downstream, will be negatively affected by this pollution. In order to prevent Jones from dumping toxic waste, Smith will have to negotiate with Jones to come up with a mutually agreeable solution. If Smith is willing to pay up to $75 per day, then Jones will likely agree to install the filter, as it will help reduce the level of pollution in the river. However, Jones may not agree to install the filter if the price is too low, as this may not cover the cost of installing and maintaining the filter. Therefore, option B is the best choice.

Consider the Following Scenario When Answering the Following Questions