The figure above shows a water monopolist operating in a market with inelasticand elastic households. To maximize profits, this monopolist willPrice, Costs 50MC($ per454thousandgallons) 40ATC35-3아25-20-15d =mr1아5-MR68.Quantity of Water (thousand gallons per day)24101214O A. sell 8,000 gallons of water per day to price elastic households.B. sell 3,500 gallons of water per day to price inelastic households and 4,500gallons of water per day to price elastic households.OC. sell 4,000 gallons of water per day to price inelastic households.OD. charge $15 per gallon to price inelastic households.E. None of the above.

Monopolist: It refers to a person who is a price maker in the market, and he has the choice to…

Answered: The figure above shows a water monop…

The figure above shows a water monop and elastic households. To maximize pr Price, Costs 50 ($ per thousand 45 gallons) 40-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The figure above shows a water monopolist operating in a market with inelastic
and elastic households. To maximize profits, this monopolist will
Price, Costs 50
MC
($ per
454
thousand
gallons) 40
ATC
35-
3아
25-
20-
15
d =mr
1아
5-
MR
6
8.
Quantity of Water (thousand gallons per day)
2
4
10
12
14
O A. sell 8,000 gallons of water per day to price elastic households.
B. sell 3,500 gallons of water per day to price inelastic households and 4,500
gallons of water per day to price elastic households.
OC. sell 4,000 gallons of water per day to price inelastic households.
OD. charge $15 per gallon to price inelastic households.
E. None of the above.

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