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: Quantity (Gallons) 0 40 80 120 160 200 240 280 320 360 400 440 480 Price (Dollars per gallon) 36 33 30 27 24 21 18 15 c. 0 gallons d. 240 gallons 12 9 630 Total Revenue and Total Profit (Dollars) 0 1,320 2,400 3,240 3,840 4,200 4,320 4,200 3,840 3,240 2,400 1,320 0 Refer to Table 17-1. What is the socially efficient quantity of water? Ⓒa. 280 gallons b. 480 gallons

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: Quantity (Gallons) 0 40 80 120 160 200 240 280 320 360 400 440 480 Price (Dollars per gallon) 36 33 30 27 24 21 18 15 c. 0 gallons d. 240 gallons 12 9 630 Total Revenue and Total Profit (Dollars) 0 1,320 2,400 3,240 3,840 4,200 4,320 4,200 3,840 3,240 2,400 1,320 0 Refer to Table 17-1. What is the socially efficient quantity of water? Ⓒa. 280 gallons b. 480 gallons

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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