Extracted text: Name
Paper Works Inc. makes paper products and dumps its waste into the Fish River....

Question

Extracted text: Name
Paper Works Inc. makes paper products and dumps its waste into the Fish River. The waste has harmed the productivity
of the river's brown trout fishery, angering anglers that love to flyfish the river. Downstream from Paper Works Inc. is a
fishing resort and guide service, Fish Ranch, who has experienced a significant decrease in profits due to waste dumped
into the river by Paper Works. Inc. Suppose that Fish Ranch sues Paper Works Inc. on behalf of all anglers harmed by
Paper Works Inc., and that the actual damages are $50 million each year.
A. Suppose that the benefit to Paper Works Inc. of dumping the waste into the river is $75 million annually. Is it
efficient for Paper Works Inc. to dump the waste into the river? How about if the benefit to Paper Works Inc. is
$25 million? Explain.
B. The court orders Paper Works Inc. to pay damages of $50 million so that all the anglers hurt by the pollution are
compensated.
a. What will Paper Works Inc. do if its benefit from dumping waste into the river is $75 million? Is this
outcome efficient?
b. How about if the benefit to Paper Works Inc. is $25 million? Is this outcome efficient?
C. Is part B an application of the Normative Coase Theorem or the Normative Hobbes Theorem? Explain.
D. What practical problem do courts run into when imposing damages in situations like this?

Tanmoy · Accepted Answer

PAPER WORKS INC.
Table of Contents
Introduction	3
A	3
B	3
a	3
b	4
C	4
D	4
References	5
Introduction
Paper Works Inc. is in the business of paper products and dumping the discharge pollutant into the river. This is socially, ethically, morally and environmentally unsafe practice. Every business has to adhere to corporate responsibility principle and must think of saving the environment instead of posing ecological disaster to humankind. This is same society which provides it with Manpower, material and other essential infrastructure.
A.
Benefit to Paper Works Inc. of dumping the waste into the river is $75 million annually and this is highly against the safe and friendly Environmental laws. These laws include standards, arrangement, order and guidelines approved and sanctioned by neighboring community/society, general public/common man, in order to curb the human treatment of inhuman world. Paper works is morally and legally bound by these laws to stop uncontrollable dumping to pollutants, waste, Bio medical discharge that has ability to cause deadly pathogens with potential severe environmental and human health consequences amongst human race. Hence not efficient for Paper Works Inc. to dump the waste into the river.
Such massive ecological disaster leading human extinction can never be justified on trivial/flimsy ground such as “Benefit accrues to Paper Works Inc. is $25 million (i.e., $75 million - $50 million). Since lives lost and environmental degradation are all irreversibly actions (Watts, 2019).
B.

Name Paper Works Inc. makes paper products and dumps its waste into the Fish River. The waste has harmed the productivity of the river's brown trout fishery, angering anglers that love to flyfish the...

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