Business, 27.11.2019 05:31 smuqtadir124
There are 2 competing users for stream water, user a and user b. the wtp for water for a is p=10-qa, and for b it's p=15-2qb, where q is the quantity of water demanded. the two users have different marginal costs of extraction for water, mca=2, while mcb=3.
a. compute the marginal net benefit (mnb) of water consumption for each user.
b. what is the optimal allocation of water when the water supply is s=15?
c. what is the surplus to each user for the optimal allocation?
d. what is the optimal allocation when s=10?
e. draw a picture of the previous solution.
Answers: 1
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There are 2 competing users for stream water, user a and user b. the wtp for water for a is p=10-qa,...
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