On a graph mark the market equilibrium and show the efficient quantity of water taken.
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 $5 a gallon. The table sets out the external cost and the social benefit of water.

Transcribed Image Text:

Quantity Marginal Marginal of water ernal cost social benefit (gallons per day) 10 20 30 40 (dollars per gallon) (dollars per gallon) 10 0 60