Refer to the Accompanying Table to Answer the Questions $\text { Willingness to Pay for Bottled Water }$

question 95

Multiple Choice

Refer to the accompanying table to answer the questions. $\text { Willingness to Pay for Bottled Water }$
$\begin{array}{lccc}\text { Quantity } & \text { City A } & \text { City B } & \text { City C } \\1 & \$ 20 & \$ 15 & \$ 14 \\2 & \$ 17 & \$ 13 & \$ 13 \\3 & \$ 14 & \$ 11 & \$ 12 \\4 & \$ 11 & \$ 9 & \$ 11 \\5 & \$ 8 & \$ 7 & \$ 10\end{array}$
$\text { Marginal Cost }=\$ 0$
-You are the only provider of bottled water for three cities. Because you have access to a natural spring, the marginal cost to produce an additional bottle is $0. If you could price-discriminate by charging a different price in each city, how many more people would have access to bottled water compared to when you charge only one price for all three cities?

• A) 1 more person
• B) 2 more people
• C) 3 more people
• D) 4 more people
• E) exactly the same number of people

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Definitions:

Manufacturing Costs

Costs that are directly associated with the manufacturing of products, such as the cost of raw materials, workforce, and overhead expenses.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.

Direct Materials Costs

The cost of raw materials that can be directly traced to the production of a specific product.

Direct Labor Costs

Expenses associated with the wages of employees who are directly involved in the production of goods or services.