Assign property rights over the array river to peter


Problem: Pete's Paper Mill emits effluent into the Array River. Toxins in the effluent kill fish. This reduces the amount of fish that Fiona's Fishery - which is downstream from the Paper Mill - can catch in a day. The cost to Fiona in reduced fish catch is $200 per day. To install technology that would allow it to prevent any effluent being released into the river will cost the Paper Mill $150 per day. Should Fiona and Pete wish to negotiate any contract about emission of effluent they must hire Leo Lawyer. Assume that any contract must be renegotiated daily, and that Leo's daily rate is $51. To achieve a socially optimal outcome the government should: Group of answer choices Assign property rights over the Array River to Fiona. Put extra fish into the river. Assign property rights over the Array River to Peter. Pay Fiona's Fishery $200 per day. Tax Pete's Paper Mill $150 per day.

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