Find the price and quantity that will satisfy the condition for static efficiency in the use of water resources given the following demand and supply equations for water:
Demand: P=600-Q
Supply: P=2+Q
To find the price and quantity that will satisfy the condition for static efficiency in the use of water resources, we need to find the equilibrium point where the demand and supply curves intersect.
First, let's set the demand and supply equations equal to each other:
600 - Q = 2 + Q
Next, let's solve this equation for Q by bringing the like terms together:
600 - 2 = Q + Q
598 = 2Q
Now divide both sides of the equation by 2:
598/2 = Q
299 = Q
So, the equilibrium quantity of water is 299.
To find the price at this equilibrium point, we can substitute the value of Q back into either the demand or supply equations. Let's use the demand equation for this calculation:
P = 600 - Q
P = 600 - 299
P = 301
Therefore, the price that satisfies the condition for static efficiency in the use of water resources is $301, and the corresponding quantity is 299 units.