7.5 At a consumption level of 2 million gallons per day, the marginal source of water is...

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7.5 At a consumption level of 2 million gallons per day, the marginal source of water is the lake, which has a marginal cost of 0.8 cent per gallon. The city should charge everyone 0.8 cent per gallon, including those who get their water from the spring.

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