What is the efficient price for water

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The inverse demand function for water (w) among urban users is given by D(w) = 10 - 2w, and the inverse demand function for water among rural users is given by D(w) = 6 - w. The total amount of water available is W = 5 .

a. What is the efficient allocation of water to the two groups of users: urban and rural?

b. What is the efficient price for water? Why?

Reference no: EM131102669

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What is the efficient price for water : The inverse demand function for water (w) among urban users is given by D(w) = 10 - 2w, and the inverse demand function for water among rural users is given by D(w) = 6 - w. The total amount of water available is W = 5. What is the efficient allocati..

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