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Mathematics, 21.09.2021 08:20 mia7955
There is a paper factory and a beer brewery by the same river. The factory will emit acidic waste into the river while the brewery needs clean water. It costs the brewery $2 million to install a water filter, and costs the factory $2.5 million to install a processer to extract the acid from waste. Determine, according to Coase theorem, if there will be a trade of the right to use the river in the following two cases. The law assigns the initial right to the brewery (it has the right to clean water). The law assigns the initial right to the factory (it has the right to pollute the river).
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