A spring runs under a village. Everyone can sink a well on her or his land and take water from the spring. Figure shows the marginal social benefit (MSB) from water and the marginal cost (MC) of taking it.

FIGURE 16.5 Problems 20 to 22 50 MSC .. . . . . 40 . . .. . ... . . . ; . . . . . . . Price and cost (cents per litre) MC 30 . . . . . . . . . . . . . . . . ". " . . . . . . . . . . 20 .'. . . . . . . . . . . . . . . . 10 . . . . . V . MSB am . . . . . . . . . O 200 400 600 800 Quantity (litres per day)