Question: If the government issues ITQs that limit the total amount of water taken to the efficient quantity, what is the market price of an ITQ?

If the government issues ITQs that limit the total amount of water taken to the efficient quantity, what is the market price of an ITQ?
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.

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

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