The city of Iqaluit normally has clean, unpolluted water. However, a recent industrial accident
caused gasoline to be discharged into their water supply and the people can no longer use
their tap water. As a result there has been a large increase in demand for bottled water.
Demand for bottled water increased from P = 3.8 - 0.01Q to P = 8.1 - 0.005Q. The price per
bottle of water is $1.19.
After the gasoline is removed demand will return to P = 3.8 - 0.01Q
Using the preventative or mitigating measures approach, calculate how much the people of
Iqaluit will value (or benefit) from eliminating the gasoline from their water.