Table 17-2 Imagine a Small Town in Which Only Two Residents, Abby

question 49

Multiple Choice

Table 17-2
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 17-2. If this market for water were perfectly competitive instead of monopolistic, how many gallons of water would be produced and sold?

• A)12 gallons
• B)8 gallons
• C)6 gallons
• D)0 gallons

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Definitions:

Substantial Performance

A legal concept that occurs when a party has completed the major obligations of a contract, entitling them to payment.

Willful Departure

An intentional decision by an employee to leave their job or position without a legitimate reason or notification to the employer.

Anticipatory Repudiation

Occurs when one party involved in a contract indicates in advance that they will not fulfill their contractual obligations, allowing the other party to take legal action.

Preemptive Strike

A military or strategic attack intended to neutralize a perceived imminent threat from an opponent before that threat can harm the party making the strike.