Table 17-1 Imagine a small town in which only two residents, Celia and Venya, own wells that produce safe drinking water. Each week Celia and Venya work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Celia and Venya can pump as much water as they want without cost so that the marginal cost of water equals zero. The town's weekly demand schedule and total revenue schedule for water is shown in the following table: Price (Dollars per gallon) 36 Quantity (Gallons) Total Revenue and Total Profit (Dollars) 40 1,320 2,400 3,240 3,840 4,200 4,320 4,200 3,840 3,240 2,400 1,320 33 80 30 120 27 160 24 200 21 240 18 280 15 320 12 360 9. 400 440 3 480 Refer to Table 17-1. If Celia and Venya operate as a profit-maximizing monopoly in the market for water, how many gallons of water will be produced and sold? O a. 240 O b. 280 OC 480 Od.0

Table 17-1 Imagine a small town in which only two residents, Celia and Venya, own wells that produce safe drinking water. Each week Celia and Venya work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Celia and Venya can pump as much water as they want without cost so that the marginal cost of water equals zero. The town's weekly demand schedule and total revenue schedule for water is shown in the following table: Price (Dollars per gallon) 36 Quantity (Gallons) Total Revenue and Total Profit (Dollars) 40 1,320 2,400 3,240 3,840 4,200 4,320 4,200 3,840 3,240 2,400 1,320 33 80 30 120 27 160 24 200 21 240 18 280 15 320 12 360 9. 400 440 3 480 Refer to Table 17-1. If Celia and Venya operate as a profit-maximizing monopoly in the market for water, how many gallons of water will be produced and sold? O a. 240 O b. 280 OC 480 Od.0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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