4. Ben 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: Cost of first bottle €1 Cost of second bottle €3 Cost of third bottle €5 Cost of fourth bottle €7 a. From this information, derive Ben's supply schedule. Graph his supply curve for bottled water. b. If the price of a bottle of water is €4, how many bottles does Ben produce and sell? How much producer sur- plus does Ben get from these sales? Show Ben's pro- ducer surplus in your graph. c. If the price rises to €6, how does quantity supplied change? How does Ben's producer surplus change? Show these changes in your graph.

4. Ben 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: Cost of first bottle €1 Cost of second bottle €3 Cost of third bottle €5 Cost of fourth bottle €7 a. From this information, derive Ben's supply schedule. Graph his supply curve for bottled water. b. If the price of a bottle of water is €4, how many bottles does Ben produce and sell? How much producer sur- plus does Ben get from these sales? Show Ben's pro- ducer surplus in your graph. c. If the price rises to €6, how does quantity supplied change? How does Ben's producer surplus change? Show these changes in your graph.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 5PA

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