# Assume that a small town is determining whether they should build a water treatment system….

1. Assume that a small town is determining whether they should build a water treatment system. It is determined that the demand for copper removal for each of the two districts in town is: where Q is the percent of copper that could be filtered by the system and P is the price in millions of dollars. Suppose that the MC of for the system is P = 6 + 0.20*Q a) On a single graph, plot the marginal benefits for the individual districts, the aggregated benefits for the entire town, and the marginal costs of filtration over the range of percent copper removed from 0 to 50. (2 points) b) What is the efficient level of copper removed? (1 point)

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