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lowing willingness to pay for the tasty refreshment: zuantity Willingness to Pay (Dollars) irst bottle 10 econd bottle 8 hird bottle 6. ourth bottle 4 ifth bottle 2

lowing willingness to pay for the tasty refreshment: zuantity Willingness to Pay (Dollars) irst bottle 10 econd bottle 8 hird bottle 6. ourth bottle 4 ifth bottle 2

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The many identical residents of some cities love drinking apple juice. The cost of producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price. Each resident has the following willingness to pay for the tasty refreshment: Quantity Willingness to Pay (Dollars) First bottle 10 Second bottle 8 Third bottle 6. Fourth bottle 4 Fifth bottle 2 Further bottles
Transcribed Image Text:The many identical residents of some cities love drinking apple juice. The cost of producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price. Each resident has the following willingness to pay for the tasty refreshment: Quantity Willingness to Pay (Dollars) First bottle 10 Second bottle 8 Third bottle 6. Fourth bottle 4 Fifth bottle 2 Further bottles
Assume that producing apple juice creates pollution, and each bottle has an external cost of $2. If the Mayor of the city decides to impose a $2 tax on each bottle of apple juice, then total surplus per person in the city before tax is and the total surplus per person after tax is O $9 and $3 O $3 and $4 O $3 and $3 O $9 and $4
Transcribed Image Text:Assume that producing apple juice creates pollution, and each bottle has an external cost of $2. If the Mayor of the city decides to impose a $2 tax on each bottle of apple juice, then total surplus per person in the city before tax is and the total surplus per person after tax is O $9 and $3 O $3 and $4 O $3 and $3 O $9 and $4
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