Question

A natural spring runs under land owned by ten people. Each person has the right to sink a well and can take water from the spring at a constant marginal cost of S6 a gallon. The table sets out the external cost and the social benefit from water Price and cost (dollars per gallon) 14- 12- Marginal external cost Marginal social benefit Quantity (gallons per day) 10 20 (dollars per gallon) 10- 10 9 8 A0 50 5 6- 60 70 Draw the marginal cost curve. Label it. Draw the marginal social benefit curve. Label it Draw the marginal social cost curve. Label it Draw a point at the market equilibrium. Label it 1. Draw a point to show the efficient quantity of water taken and the marginal social benefit at that quantity. 2- 10 20 30 Quantity of water (gallons per day) Aг 50 60. Label it 2 >Draw only the objects specified the question.

Answer 1

Manginat imters ectrion External + ме Co St MSC MSB MC and at intersetin MSA MSC anol ab

M Manal ESTES Margnattme cost