Chapter 15: Water Pricing Exercise: Trading Water Rights Suppose the estimated inverse demand functions for municipal and irrigation water use are given as follows: P = 100 - 2C]c and P = 50 - 0.5qi Due to the historical development of water rights, q; is the quantity of water available to irrigators and on is the total quantity available to people in the city. The market clearing prices are pi = $80 and pa = $15. Without changing the total amount of water use, how much water use can be traded and what would be the new prices for both users? What would be the total gains from the trade