Table 17-1 Imagine a Small Town in Which Only Two Residents,Abby and Residents,Abby

question 129

Multiple Choice

Table 17-1
Imagine a small town in which only two residents,Abby and Brad,own wells that produce safe drinking water.Each week Abby and Brad work together to decide how many gallons of water to pump.They bring water to town and sell it at whatever price the market will bear.To keep things simple,suppose that Abby and Brad can pump as much water as they want without cost so that the marginal cost is zero.The weekly town demand schedule and total revenue schedule for water is shown in the table below:

-Refer to Table 17-1.Suppose that Abby and Brad work together in order to operate as a profit-maximizing monopolist.What price will they charge for water?

• A) $8
• B) $7
• C) $6
• D) $4

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Definitions:

Second-born

Refers to the child that is born second in order within a family, following the first-born.

Existential Import

The presumption that a statement implies the existence of the subject it mentions.

Modern View

A contemporary perspective or understanding of a subject, reflecting the latest developments or ideas.

Validity

In logic and reasoning, it refers to the attribute of an argument where if the premises are true, the conclusion necessarily follows.