When water cannot be traded among current and potential users, then
A) each user will take more care to conserve, because added water cannot be obtained.
B) users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs.
C) efficiency improves, as dry years can be better anticipated and planned for, and every user knows the quantity that will be available.
D) water will not flow to its highest valued uses, and some users will use water for relatively low-valued uses, because they cannot gain by selling it to others.

Question

Quizplus · Accepted Answer

When water cannot be traded, it cannot be reallocated to higher-valued uses, leading to inefficiency as some users may use it for less valuable purposes.

When Water Cannot Be Traded Among Current and Potential Users