Aquifer use and spring flow

San Antonio is currently being sued by the Sierra Club and other groups for pumping too much water out of the Edwards aquifer. The Sierra Club argues that San Antonio's use of the aquifer leaves too little water in it to support several natural springs that are home to various endangered species. This question asks you to think about that problem a bit. Suppose you were given the following facts:

• Annual flow through the aquifer is 400 units;
  
• San Antonio gets to extract water first and whatever is left over flows out the springs;
  
• San Antonio's willingness to pay for drinking water is given by P = 4000 - 10*Qd, where Qd is the number of units of drinking water;
  
• Water can be extracted from the aquifer at zero cost;
  
• There are 800 environmentalists concerned about the endangered species;
  
• Each environmentalist receives the following marginal benefit when there are Qs units of water flowing out of the aquifer: MB = 5 - Qs/20.
  
• The environmentalists do not actually use the water, they just like knowing it is there.

Please answer the following questions:

1. Find the efficient allocation of water between San Antonio (Qd) and the springs (Qs).
2. Suppose the water is allocated by a market. How much will end up coming out of the springs? Explain as thoroughly as you can why the situation turns out this way. Be sure to discuss any key aspects of the problem. Why does the market get this wrong?