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Natural Resource Damage Assessment: Methods and Cases

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Price of groundwater<br />

P0<br />

P1<br />

Price of groundwater<br />

D<br />

P0<br />

P1<br />

A<br />

B<br />

A<br />

B<br />

Figure 3.1: Market Price Method<br />

C<br />

J<br />

K<br />

Q0<br />

Supply<br />

C<br />

K<br />

Q0<br />

D<br />

D0 is the dem<strong>and</strong> for groundwater before contamination.<br />

D1 is the dem<strong>and</strong> for groundwater after contamination.<br />

P0 is the price of groundwater before contamination.<br />

P1 is the price of groundwater after contamination.<br />

A, B, C, <strong>and</strong> K identify key points on the graphs; see text.<br />

59<br />

Supply<br />

Panel B: Upward-sloping supply<br />

D1<br />

D1<br />

D0<br />

Quantity of<br />

groundwater<br />

Panel A: Fixed supply<br />

D0<br />

Quantity of<br />

groundwater

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