Suppose Erie Textiles Can Dispose of Its Waste "For Free

question 170

Multiple Choice

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 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 and losses (in thousands of dollars) for the three parties are listed below.  
When Erie Textiles operates without a filter, the total gain (in thousands of dollars) to all three parties is ________.

• A)$985
• B)$325
• C)$510
• D)$475

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Definitions:

Unascertained Goods

Goods that have not been specifically identified or allocated to a contract at the time of its formation.

Appropriated

The act of taking something for one's own use, typically without the owner's permission.

Title

The legal right to own, possess, or use property.

Title

The legal right to own, use, or sell a particular piece of property, including real estate or vehicles.