3 Ch 7 Problems And Applications Q6 Suppose Kevin Is The Only Seller In The Market For Bottled Water And Edison Is The 1 (137.35 KiB) Viewed 22 times
3. Ch. 7 Problems and Applications Q6 Suppose Kevin is the only seller in the market for bottled water and Edison is the only buyer. The following lists show the value Edison places on a bottle of water and the cost Kevin incurs to produce each bottle of water: Edison's Value Kevin's Costs Value of first bottle: $9 Value of second bottle: $7 Value of third bottle: $4 Cost of first bottle: $1 Cost of second bottle: $4 Cost of third bottle: $7 Cost of fourth bottle: $9 Value of fourth bottle: $1 The following table shows their respective supply and demand schedules: Price Quantity Supplied Quantity Demanded More than $9 4 0 $7 to $9 3 1 $4 to $7 2 2 $1 to $4 1 3 $1 or less 0 4 Use Kevin's supply schedule and Edison's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $5, and $8. Enter these values in the following table. Price Quantity Supplied Quantity Demanded 2 5 8 A price of brings supply and demand into equilibrium. , producer surplus is $ and total At the equilibrium price, consumer surplus is $ surplus is $
A price of brings supply and demand into equilibrium. $2 At the equ um price, consumer surplus is $ , producer surplus is $ and total $5 I surplus is $8 If Kevin produced and Edison consumed one less bottle of water, total surplus would If instead, Kevin produced and Edison consumed one additional bottle of water, total surplus would
producer surplus is $ I I At the equilibrium price, consumer surplus is $ surplus is $ If Kevin produced and Edison consumed one less bottle of water, total surplus would fall If instead, Kevin produced and Edison consumed one additional bottle of water, total rise and total us would
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