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 $6 a litre. The graph shows the marginal cost and marginal social cost curves of water, and marginal social benefit curve from water. The government issues ITQs to land owners that limit the total amount of water taken to the efficient quantity. Draw an arrow to show the market price of an ITQ at the efficient quantity. The market price of the ITQ is Sa litre. >>> Answer to 2 decimal places. 147 12- 10- 8- 6- 4- 2- 0- (0,7) Price and cost (dollars per litre) 10 20 30 40 50 60 Quantity of water (litres per day) MSC MC MSB 70 80 Q G >>> Draw only the objects specified in the 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 $6 a litre. The graph shows the marginal cost and marginal social cost curves of water, and marginal social benefit curve from water. The government issues ITQs to land owners that limit the total amount of water taken to the efficient quantity. Draw an arrow to show the market price of an ITQ at the efficient quantity. The market price of the ITQ is Sa litre. >>> Answer to 2 decimal places. 147 12- 10- 8- 6- 4- 2- 0- (0,7) Price and cost (dollars per litre) 10 20 30 40 50 60 Quantity of water (litres per day) MSC MC MSB 70 80 Q G >>> Draw only the objects specified in the question.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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 $6 a litre.
C
The graph shows the marginal cost and marginal social cost curves of water, and marginal social benefit curve from water.
The government issues ITQs to land owners that limit the total amount of water taken to the efficient quantity.
Draw an arrow to show the market price of an ITQ at the efficient quantity.
The market price of the ITQ is $a litre.
>>> Answer to 2 decimal places.
14-
12-
10-
8-
6-
4
2-
0-
0
(0,7)
Price and cost (dollars per litre)
10
20 30 40 50 60
Quantity of water (litres per day)
MSC
-MC
MSB
70 80
Q
✔
>>> Draw only the objects specified in the question.
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