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Show If the marginal costs were all equal, we would get: ( 11) MVPx = MVP2 « • * * • a MVPn = k > X « . where k = X + y ££ L . If, as with the more general case, the marginal costs dW of water in terms of resources are positive and not equal, we get in equilibrium: ( 12) MVPi - X , MVP2 - X •..;.. MVPn - X « y MCi MC2 * * * * MCn where MCi stands for --- * dWi Equation ( 12) says that the ratios of the differences between the ( joint) marginal values and universal marginal value of water to the marginal costs of water in terms of resources must all be equal to the universal marginal cost ( in terms of income foregone) of supplying water intake to the economy, i. e., the ratios must all be equal to y . The differences ( MVPj * X ) represent what may be called the net marginal values of water in terms of our welfare criteria-- income. They should, in equilibrium, all be equal to their corresponding marginal cost of water in terms of income, namely, y MCi-- the universal marginal cost ( in terms of income) of resources invested in water facilities times the marginal cost ( in terms of water facility resources) of water. Symbolically, therefore, ( 13) ( MVPi - X) eJKMQ ( i = 1, • • ., n) are simply a rearrangement of ( 7). In other words, what ( 13) says is that, in equilibrium, the net marginal income value of water should equal the marginal income cost of supplying water. To illustrate, if MCi gives us the marginal amount of capital required to supply an additional unit of water to the ith use, and y is equal to the income rate of return on capital, then y MCi * s the 14 |