2. It is a hot day, and Ovi is thirsty. Here is the value he places on each bottle of water:Value of first bottleValue of second bottleValue of third bottle$7$5$3$1Value of fourth bottleMeanwhile, Emon owns a water pump. Because pumping large amounts of water isharder than pumping small amounts, the cost of producing a bottle of water rises ashe pumps more. Here is the cost he incurs to produce each bottle of water:$1Cost of first bottleCost of second bottle $3Cost of third bottleCost of fourth bottle$5$7Consider a market in which Ovi is the buyer and Emon is the seller.a. Use Emon's supply schedule and Ovi's demand schedule to find the quantitysupplied and quantity demanded at prices of $2, $4, and $6. Which of these pricesbrings supply and demand into equilibrium?b. What are consumer surplus, producer surplus, and total surplus in thisequilibrium?c. If Emon produced and Ovi consumed one fewer bottle of water, what wouldhappen to total surplus?d. If Emon produced and Ovi consumed one additional bottle of water, what wouldhappen to total surplus?

Disclaimer :- as you posted multipart questions we are supposed to solve only the first 3 questions.…

2. It is a hot day, and Ovi is thirsty. Here is the value he places on each bottle of water: $7 $5 $3 $1 Value of first bottle Value of second bottle Value of third bottle Value of fourth bottle Meanwhile, Emon owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as he pumps more. Here is the cost he incurs to produce each bottle of water: $1 Cost of first bottle Cost of second bottle $3 Cost of third bottle $5 $7 Cost of fourth bottle Consider a market in which Ovi is the buyer and Emon is the seller. a. Use Emon's supply schedule and Ovi's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Which of these prices brings supply and demand into equilibrium? b. What are consumer surplus, producer surplus, and total surplus in this equilibrium? c. If Emon produced and Ovi consumed one fewer bottle of water, what would happen to total surplus?

2. It is a hot day, and Ovi is thirsty. Here is the value he places on each bottle of water: $7 $5 $3 $1 Value of first bottle Value of second bottle Value of third bottle Value of fourth bottle Meanwhile, Emon owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as he pumps more. Here is the cost he incurs to produce each bottle of water: $1 Cost of first bottle Cost of second bottle $3 Cost of third bottle $5 $7 Cost of fourth bottle Consider a market in which Ovi is the buyer and Emon is the seller. a. Use Emon's supply schedule and Ovi's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Which of these prices brings supply and demand into equilibrium? b. What are consumer surplus, producer surplus, and total surplus in this equilibrium? c. If Emon produced and Ovi consumed one fewer bottle of water, what would happen to total surplus?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 42P: A small company that shovels sidewalks and driveways has 100 homes signed up for its services this...

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