Hand written solutions are strictly prohibited Gilberto owns a water pump. Becausepumping large amounts of water is harderthan pumping small amounts, the cost ofproducing a bottle of water rises as hepumps more. Here is the cost he incurs toproduce each bottle of water:Cost of first bottle: $1Cost of second bottle: $3Cost of third bottle: $5Cost of fourth bottle: $7From this information, complete the following table by deriving Gilberto's supply schedule.PriceQuantity Supplied$1 or less$1 to $3$3 to $5$5 to $7More than $7Based on Gilberto's willingness to sell, plot his supply curve as a step function on the followinggraph using the orange points (square symbol). Be sure to plot your first point at (0, 0).1021Quantity of WaterSuppose the price of a bottle of water is $4.In this case, Gilberto receives $-OGibe's SupplyIf the price rises to $6, Gilberto now sellsproducer surplus to $Price $4+Quantity SoldUse 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 Gilberto will produce and sell at that price. Finally, use thepurple point (diamond symbol) to shade the area that represents Gilberto's producer surplus.Producer Surplusin producer surplus from his water sales.bottles of water. Thishis

A supply curve is a graphical representation of the relationship between the quantity of a good or…

Answered: Gilberto owns a water pump. Because…

Gilberto 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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Hand written solutions are strictly prohibited

Gilberto 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 Gilberto's supply schedule.
Price
Quantity Supplied
$1 or less
$1 to $3
$3 to $5
$5 to $7
More than $7
Based on Gilberto'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
2
1
Quantity of Water
Suppose the price of a bottle of water is $4.
In this case, Gilberto receives $
-O
Gibe's Supply
If the price rises to $6, Gilberto now sells
producer surplus to $
Price $4
+
Quantity Sold
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 Gilberto will produce and sell at that price. Finally, use the
purple point (diamond symbol) to shade the area that represents Gilberto's producer surplus.
Producer Surplus
in producer surplus from his water sales.
bottles of water. This
his

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Your food-services company has been named as the sole provider of meals at a small university. The cost and demand schedules are: Total Total Sold per Day Price per Meal Fixed Cost Variable Cost Total Revenue $3.50 $150 100 $3.25 $150 $300 $325 200 $3.00 $150 $500 $600 300 $2.75 $150 $650 $825 400 $2.50 $150 $750 $1000 500 $2.25 $150 $830 $1125 600 $2.00 $150 $905 $1200 700 $1.75 $150 $995 $1225 TABLE 10-2 Refer to Table 10-2, and suppose that the firm is a single-price monopolist. At the profit-maximizing level of output, the price elasticity of demand is greater than one. O one. infinite O less than one. impossible to know with the available information. Suppose a monopolist faces the demand curve and cost curves shown below. P5 MC ATC Demand Po MR Q4 Qs Quantity FIGURE 10-4 Refer to Figure 10-4. If this single-price monopolist is producing at the profit-maximizing level of output, the total profit is represented by the area O PaceP2. O PąabP2. O OPofQo- O OPgaQo- O OP26Q0- At the…