Question: Assume there are two households (Dwight and Wright) that depend on a common water supply for their daily needs. Dwight's marginal willingness to pay for

Assume there are two households (Dwight and Wright) that depend on a common water supply for their daily needs. Dwight's marginal willingness to pay for water quality is given by MWTP=150-Q and Wright's marginal willingness to pay for water quality is given by MWTP=40-0.5Q, where Q is an index of water quality. The marginal cost for improving water quality is constant at $100 i.e. MC=100.

Illustrate the socially efficient level (using the combined marginal willingness to pay) level of water quality on a single graph ?

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