Stream Preservation. Consider a trout stream that is threatened with destruction by a nearby logging operation. Each of the 10,000 local fishers would be willing to pay $5 to preserve the stream. The...

Stream Preservation. Consider a trout stream that is threatened with destruction by a nearby logging operation. Each of the 10,000 local fishers would be willing to pay $5 to preserve the stream. The owner of the land would incur a cost of $20,000 to change the logging operation to protect the stream.

a. Is the preservation of the stream efficient from a social perspective?

b. If the landowner has the right to log the land any way he wants, will the stream be preserved?

c. Propose a solution to this problem. Describe a transaction that would benefit the fishers and the landowner.