Suppose Alex is the only seller in the market for bottled water and Raphael is the only buyer. The following lists show the value Raphael places on a bottle of water and the cost Alex incurs to produce each bottle of water: Value of first bottle: $7 Value of second bottle: $5 Value of third bottle: $3 Value of fourth bottle: $1 Raphael's Value Price $1 or less The following table shows their respective supply and demand schedules: $1 to $3 $3 to $5 $5 to $7 More than $7 Quantity Demanded Quantity Supplied 4 3 2 1 0 0 1 2 3 4 Alex's Costs Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle: $5 Cost of fourth bottle: $7

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose Alex is the only seller in the market for bottled water and Raphael is the only buyer. The following lists show the value Raphael places on a
bottle of water and the cost Alex incurs to produce each bottle of water:
Value of first bottle: $7
Value of second bottle: $5
Value of third bottle: $3
Value of fourth bottle: $1
Raphael's Value
Price
$1 or less
The following table shows their respective supply and demand schedules:
$1 to $3
$3 to $5
$5 to $7
More than $7
Quantity Demanded Quantity Supplied
4
3
2
1
0
0
1
2
3
4
Alex's Costs
Cost of first bottle: $1
Cost of second bottle: $3
Cost of third bottle: $5
Cost of fourth bottle: $7
Transcribed Image Text:Suppose Alex is the only seller in the market for bottled water and Raphael is the only buyer. The following lists show the value Raphael places on a bottle of water and the cost Alex incurs to produce each bottle of water: Value of first bottle: $7 Value of second bottle: $5 Value of third bottle: $3 Value of fourth bottle: $1 Raphael's Value Price $1 or less The following table shows their respective supply and demand schedules: $1 to $3 $3 to $5 $5 to $7 More than $7 Quantity Demanded Quantity Supplied 4 3 2 1 0 0 1 2 3 4 Alex's Costs Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle: $5 Cost of fourth bottle: $7
Use Alex's supply schedule and Raphael's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter
these values in the following table.
Price Quantity Demanded Quantity Supplied
2
4
6
A price of
brings supply and demand into equilibrium.
At the equilibrium price, consumer surplus is $
I
producer surplus is $
If Alex produced and Raphael consumed one less bottle of water, total surplus would
I
and total surplus is $
If instead, Alex produced and Raphael consumed one additional bottle of water, total surplus would
Transcribed Image Text:Use Alex's supply schedule and Raphael's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter these values in the following table. Price Quantity Demanded Quantity Supplied 2 4 6 A price of brings supply and demand into equilibrium. At the equilibrium price, consumer surplus is $ I producer surplus is $ If Alex produced and Raphael consumed one less bottle of water, total surplus would I and total surplus is $ If instead, Alex produced and Raphael consumed one additional bottle of water, total surplus would
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