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: $2 Cost of second bottle: $4 Cost of third bottle: $6 Cost of fourth bottle: $8 From this information, complete the following table by deriving Yakov's supply schedule. Price Quantity Supplied More than $8 $6 to $8 $4 to $6 $2 to $4 $2 or less Based on 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). Suppose the price of a bottle of water is $5. Use the black line (plus symbol) to draw a price line at $5. Next use the grey point (star symbol) to indicate how many bottles of water Yakov will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Yakov's producer surplus. In this case, Yakov receives in producer surplus from his water sales. If the price rises to $7, Yakov now sells bottles of water. This his producer surplus to
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: $2 Cost of second bottle: $4 Cost of third bottle: $6 Cost of fourth bottle: $8 From this information, complete the following table by deriving Yakov's supply schedule. Price Quantity Supplied More than $8 $6 to $8 $4 to $6 $2 to $4 $2 or less Based on 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). Suppose the price of a bottle of water is $5. Use the black line (plus symbol) to draw a price line at $5. Next use the grey point (star symbol) to indicate how many bottles of water Yakov will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Yakov's producer surplus. In this case, Yakov receives in producer surplus from his water sales. If the price rises to $7, Yakov now sells bottles of water. This his producer surplus to
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section30.2: Internalizing Externalities
Problem 2ST
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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: | $2 |
| Cost of second bottle: | $4 |
| Cost of third bottle: | $6 |
| Cost of fourth bottle: | $8 |
From this information, complete the following table by deriving Yakov's supply schedule.
|
|
Quantity Supplied
|
|---|---|
| More than $8 |
|
| $6 to $8 |
|
| $4 to $6 |
|
| $2 to $4 |
|
| $2 or less |
|
Based on 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).
Suppose the price of a bottle of water is $5.
Use the black line (plus symbol) to draw a price line at $5. Next use the grey point (star symbol) to indicate how many bottles of water Yakov will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Yakov's producer surplus .
In this case, Yakov receives
in producer surplus from his water sales.
If the price rises to $7, Yakov now sells
bottles of water. This his producer surplus to
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