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Suppose Erie Textiles Can Dispose of Its Waste "For Free

question 140

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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. 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.   Local fishermen and bird watchers would be willing to compensate Erie Textiles ________ for operating with a filter. A) up to $310,000 B) no more than $235,000 C) no more than $75,000 D) nothing Local fishermen and bird watchers would be willing to compensate Erie Textiles ________ for operating with a filter.

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Definitions:

F.O.B. Destination

A shipping term indicating that the seller bears the shipping costs and maintains ownership and responsibility for the goods until they are delivered to the buyer's specified location.

Seller

An individual or entity that provides goods or services to another party in exchange for monetary compensation.

Freight Cost

Expense associated with transporting goods, materials, or merchandise from one location to another, typically incurred by the seller or buyer depending on the agreed terms.

Children's Well-being

The overall health, happiness, and prosperity of children, encompassing physical, emotional, and social aspects.

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