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There Are Only Two Users of a Stream,a Chemical Plant

Question 111

Multiple Choice

There are only two users of a stream,a chemical plant that uses the stream to dump wastes and a fish farm.If the fish farm is granted the right to a pollution-free stream but is free to give up that right in exchange for a payment from the chemical plant,


A) the fish farm will never consider the fact that its operations increase the cost of production for the chemical plant.
B) some type of government regulation is required.
C) a corrective tax on the output of the fish farm is required to achieve efficiency.
D) the chemical plant will not dump its wastes if the fish farm values the stream more than the chemical plant values dumping rights.
E) the chemical plant will have to shut down.

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