Treating waste water is expensive and reduces profits. Imagine there are 10 factories on the riverbank. They compete with each other and so want to keep their costs minimum as well. Will they treat and clean waste before throwing in the river? If not, could they cooperate with each other to ensure each treats water before release in the river? If not, what other ‘solutions’ are possible?

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter17: Externalities And The Environment
Section: Chapter Questions
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Treating waste water is expensive and reduces profits. Imagine there are 10 factories on the riverbank. They compete with each other and so want to keep their costs minimum as well. Will they treat and clean waste before throwing in the river? If not, could they cooperate with each other to ensure each treats water before release in the river? If not, what other ‘solutions’ are possible?

 

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