Suppose Kenji is the only seller in the market for bottled water and Eric is the only buyer. The following lists show the value Eric places on a bottle of water and the cost Kenji incurs to produce each bottle of water:   Eric's Value Value of first bottle: $7 Value of second bottle: $5 Value of third bottle: $3 Value of fourth bottle: $1   Kenji's Costs Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle: $5 Cost of fourth bottle: $7     The following table shows their respective supply and demand schedules: Price Quantity Demanded Quantity Supplied $1 or less 4 0 $1 to $3 3 1 $3 to $5 2 2 $5 to $7 1 3 More than $7 0 4   Use Kenji's supply schedule and Eric'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 ____, producer surplus is   ____, and total surplus is __   .   If Kenji produced and Eric consumed one less bottle of water, total surplus would    .____   If instead, Kenji produced and Eric consumed one additional bottle of water, total surplus would    .____

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Suppose Kenji is the only seller in the market for bottled water and Eric is the only buyer. The following lists show the value Eric places on a bottle of water and the cost Kenji incurs to produce each bottle of water:
  Eric's Value
Value of first bottle: $7
Value of second bottle: $5
Value of third bottle: $3
Value of fourth bottle: $1
  Kenji's Costs
Cost of first bottle: $1
Cost of second bottle: $3
Cost of third bottle: $5
Cost of fourth bottle: $7
 
 
The following table shows their respective supply and demand schedules:
Price
Quantity Demanded
Quantity Supplied
$1 or less 4 0
$1 to $3 3 1
$3 to $5 2 2
$5 to $7 1 3
More than $7 0 4
 
Use Kenji's supply schedule and Eric'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 ____, producer surplus is
 
____, and total surplus is __
 
.
 
If Kenji produced and Eric consumed one less bottle of water, total surplus would    .____
 
If instead, Kenji produced and Eric consumed one additional bottle of water, total surplus would    .____
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