The many identical residents of some city love drinking apple juice. The cost of producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price. Each resident has the following willingness to pay for the tasty refreshment: Quantity Willingness to Pay (Dollars) First bottle 10 Second bottle 8 Third bottle Fourth bottle Fifth bottle 2 Further bottles Assume that producing apple juice creates pollution, and each bottle has an external cost of $2. The Mayor of the city decides to impose a $2 tax on each bottle of apple juice, then total surplus 4)

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Chapter1: Making Economics Decisions
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The mayor of the city decides to impose a $2 tax on each bottle of apple juice, then the total surplus is? 

The many identical residents of some city love drinking apple juice. The cost of
producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price.
Each resident has the following willingness to pay for the tasty refreshment:
Quantity
Willingness to Pay
(Dollars)
First bottle
10
Second bottle
8
Third bottle
6
Fourth bottle
4
Fifth bottle
2
Further bottles
Assume that producing apple juice creates pollution, and each bottle has an external cost
of $2. The Mayor of the city decides to impose a $2 tax on each bottle of apple juice, then
total surplus
Transcribed Image Text:The many identical residents of some city love drinking apple juice. The cost of producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price. Each resident has the following willingness to pay for the tasty refreshment: Quantity Willingness to Pay (Dollars) First bottle 10 Second bottle 8 Third bottle 6 Fourth bottle 4 Fifth bottle 2 Further bottles Assume that producing apple juice creates pollution, and each bottle has an external cost of $2. The Mayor of the city decides to impose a $2 tax on each bottle of apple juice, then total surplus
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