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Alex 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:$1Cost of second bottle:$4Cost of third bottle:$7Cost of fourth bottle:$9 From this information, complete the following table by deriving Alex's supply schedule. Price Quantity Supplied More than $9 $7 to $9 $4 to $7 $1 to $4 $1 or less Based on Alex'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). Alex's SupplyPrice = $5Quantity Sold Producer Surplus012345109876543210Price of WaterQuantity of Water 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 Alex will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Alex's producer surplus. In this case, Alex receives in producer surplus from his water sales. If the price rises to $8, Alex now sells bottles of water. This his producer surplus to.

Alex 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:$1Cost of second bottle:$4Cost of third bottle:$7Cost of fourth bottle:$9 From this information, complete the following table by deriving Alex's supply schedule. Price Quantity Supplied More than $9 $7 to $9 $4 to $7 $1 to $4 $1 or less Based on Alex'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). Alex's SupplyPrice = $5Quantity Sold Producer Surplus012345109876543210Price of WaterQuantity of Water 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 Alex will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Alex's producer surplus. In this case, Alex receives in producer surplus from his water sales. If the price rises to $8, Alex now sells bottles of water. This his producer surplus to.

Essentials of Economics (MindTap Course List)
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
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Alex 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:$1Cost of second bottle:$4Cost of third bottle:$7Cost of fourth bottle:$9 From this information, complete the following table by deriving Alex's supply schedule. Price Quantity Supplied More than $9 $7 to $9 $4 to $7 $1 to $4 $1 or less Based on Alex'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). Alex's SupplyPrice = $5Quantity Sold Producer Surplus012345109876543210Price of WaterQuantity of Water 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 Alex will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Alex's producer surplus. In this case, Alex receives in producer surplus from his water sales. If the price rises to $8, Alex now sells bottles of water. This his producer surplus to.
Transcribed Image Text:Alex 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:$1Cost of second bottle:$4Cost of third bottle:$7Cost of fourth bottle:$9 From this information, complete the following table by deriving Alex's supply schedule. Price Quantity Supplied More than $9 $7 to $9 $4 to $7 $1 to $4 $1 or less Based on Alex'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). Alex's SupplyPrice = $5Quantity Sold Producer Surplus012345109876543210Price of WaterQuantity of Water 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 Alex will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Alex's producer surplus. In this case, Alex receives in producer surplus from his water sales. If the price rises to $8, Alex now sells bottles of water. This his producer surplus to.
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