Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water are shown in the table below. Weekly Quantity (in gallons) Price Weekly Total Revenue (and Total Profit) 0 $12 $ 0 25 11 275 50 10 500 75 9 675 100 8 800 125 7 875 150 6 900 175 5 875 200 4 800 225 3 675 250 2 500 275 1 275 300 0 0 Refer to Table 17-5. Since Kunal and Naj operate as a profit-maximizing monopoly in the market for water, what price will they charge for water? Group of answer choices $2 $4 $6 $7
Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water are shown in the table below. Weekly Quantity (in gallons) Price Weekly Total Revenue (and Total Profit) 0 $12 $ 0 25 11 275 50 10 500 75 9 675 100 8 800 125 7 875 150 6 900 175 5 875 200 4 800 225 3 675 250 2 500 275 1 275 300 0 0 Refer to Table 17-5. Since Kunal and Naj operate as a profit-maximizing monopoly in the market for water, what price will they charge for water? Group of answer choices $2 $4 $6 $7
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Table 17-5. Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero.
The weekly town demand schedule and total revenue schedule for water are shown in the table below.
Refer to Table 17-5. Since Kunal and Naj operate as a profit-maximizingmonopoly in the market for water, what price will they charge for water?
The weekly town demand schedule and total revenue schedule for water are shown in the table below.
|
Weekly
Quantity (in gallons) |
Price |
Weekly
Total Revenue (and Total Profit) |
|
0
|
$12
|
$ 0
|
|
25
|
11
|
275
|
|
50
|
10
|
500
|
|
75
|
9
|
675
|
|
100
|
8
|
800
|
|
125
|
7
|
875
|
|
150
|
6
|
900
|
|
175
|
5
|
875
|
|
200
|
4
|
800
|
|
225
|
3
|
675
|
|
250
|
2
|
500
|
|
275
|
1
|
275
|
|
300
|
0
|
0
|
Refer to Table 17-5. Since Kunal and Naj operate as a profit-maximizing
Group of answer choices
$2
$4
$6
$7
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