Mega Farm overlies an aquifer that has 18 AF of groundwater left. The farm is deciding how to efficiently allocate their remaining groundwater over the next two years knowing that as they pump groundwater for irrigation, groundwater levels will decline, and as a result, the cost of pumping will increase. The marginal cost and benefit curves for groundwater for years 1 and 2 are given in the figure below: 22 MB1 MC₁ 22 3.1 20 22 groundwater MB₁ 18.9 MC₂ 22 groundwater

Mega Farm overlies an aquifer that has 18 AF of groundwater left. The farm is deciding how to efficiently allocate their remaining groundwater over the next two years knowing that as they pump groundwater for irrigation, groundwater levels will decline, and as a result, the cost of pumping will increase. The marginal cost and benefit curves for groundwater for years 1 and 2 are given in the figure below: 22 MB1 MC₁ 22 3.1 20 22 groundwater MB₁ 18.9 MC₂ 22 groundwater

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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