Author Question: A polluted river has 20 homes on it that rent for 1,000 each per month. Homes on a similar river ... (Read 165 times)

Sufayan.ah · **on:** Jun 29, 2018

A polluted river has 20 homes on it that rent for 1,000 each per month. Homes on a similar river that is not polluted rent for 2,000 each per month.

The river is polluted because there are two factories on the river that dump polluted water in the river. Each factory could install a filter that would cost 5,000 each and would reduce the pollution in the water to a negligible level. The external cost in this problem is A) 20,000.
B) 5,000.
C) 10,000.
D) 30,000.

Question 2

In the figure above, Nike's economic profit is ________.

A) 3,000
B) 1,800
C) 9,000
D) zero