Antonio 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: $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 Antonio's supply schedule. Price Quantity Supplied $2 or less $2 to $4 $4 to $6 $6 to $8 More than $8 Based on Antonio'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). 10 Antonio's Supply Price = $5 Quantity Sold Producer Surplus Quantity 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 Antonio will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Antonio's producer surplus. In this case, Antonio receives $ in producer surplus from his water sales. If the price rises to $7, Antonio now sells bottles of water. This his producer surplus to s Price of Water
Antonio 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: $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 Antonio's supply schedule. Price Quantity Supplied $2 or less $2 to $4 $4 to $6 $6 to $8 More than $8 Based on Antonio'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). 10 Antonio's Supply Price = $5 Quantity Sold Producer Surplus Quantity 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 Antonio will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Antonio's producer surplus. In this case, Antonio receives $ in producer surplus from his water sales. If the price rises to $7, Antonio now sells bottles of water. This his producer surplus to s Price of Water
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
At the bottom... the two drop down choices are increases or decreases.
Transcribed Image Text:Antonio 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:
$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 Antonio's supply schedule.
Price
Quantity Supplied
$2 or less
$2 to $4
$4 to $6
$6 to $8
More than $8
Transcribed Image Text:Based on Antonio'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).
10
Antonio's Supply
Price = $5
Quantity Sold
Producer Surplus
Quantity 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 Antonio will
produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Antonio's producer surplus.
In this case, Antonio receives $
in producer surplus from his water sales.
If the price rises to $7, Antonio now sells
bottles of water. This
his producer surplus to s
Price of Water
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