Suppose Texas is trying to decide how many miles of the Guadaluperiver it should preserve from property development in a particular community. There are 200people in the community, each of whom has an identical inverse demand function given by W =10- 1Q, where Q is the number of miles preserved and W is the marginal willingness to pay when Qmiles of the river is preserved.

Suppose the marginal cost of preservation is $250per mile.

How many miles should be preserved for an efficient allocation?