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5. Problems and Applications Q5 Nick 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 From this information, complete the following table by deriving Nick's supply schedule. Quantity Supplied Price More than $7 $5 to $7 $3 to $5 $1 to $3 $1 or less

5. Problems and Applications Q5 Nick 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 From this information, complete the following table by deriving Nick's supply schedule. Quantity Supplied Price More than $7 $5 to $7 $3 to $5 $1 to $3 $1 or less

Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter7: Demand And Supply
Section: Chapter Questions
Problem 20AA
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5. Problems and Applications Q5 Nick 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 From this information, complete the following table by deriving Nick's supply schedule. Quantity Supplied Price More than $7 $5 to $7 $3 to $5 $1 to $3 $1 or less
Transcribed Image Text:5. Problems and Applications Q5 Nick 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 From this information, complete the following table by deriving Nick's supply schedule. Quantity Supplied Price More than $7 $5 to $7 $3 to $5 $1 to $3 $1 or less
Based on Nick's willingness to sell, plot his supply curve as a step function on the following graph using the orange points (square symbol). Be sure to plot your first point at (0, 0). Price of Water 10 9 100 8 7 8 10 3 2 1 0 0 2 3 Quantity of Water Suppose the price of a bottle of water is $4. In this case, Nick receives $ 5 If the price rises to $6, Nick now sells Nick's Supply Price = $4 Use the black line (plus symbol) to draw a price line at $4. Next use the grey point (star symbol) to indicate how many bottles of water Nick will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Nick's producer surplus. bottles of water. This Quantity Sold Producer Surplus in producer surplus from his water sales. his producer surplus to $
Transcribed Image Text:Based on Nick's willingness to sell, plot his supply curve as a step function on the following graph using the orange points (square symbol). Be sure to plot your first point at (0, 0). Price of Water 10 9 100 8 7 8 10 3 2 1 0 0 2 3 Quantity of Water Suppose the price of a bottle of water is $4. In this case, Nick receives $ 5 If the price rises to $6, Nick now sells Nick's Supply Price = $4 Use the black line (plus symbol) to draw a price line at $4. Next use the grey point (star symbol) to indicate how many bottles of water Nick will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Nick's producer surplus. bottles of water. This Quantity Sold Producer Surplus in producer surplus from his water sales. his producer surplus to $
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