Table 17-1
Imagine a Small Town in Which Only Two

question 162

Multiple Choice

Table 17-1
Imagine a small town in which only two residents, Sydney and Matthew, own wells that produce safe drinking water. Each week Sydney and Matthew work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Sydney and Matthew can pump as much water as they want without cost so that the marginal cost of water equals zero. The town's weekly demand schedule and total revenue schedule for water is shown in the following table:
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$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\\text { (Gallons) }\end{array} & \begin{array} { c } \text { Price } \\\text { (Dollars per gallon) }\end{array} & \begin{array} { c } \text { Total Revenue and Total Profit } \\\text { (Dollars) }\end{array} \\\hline 0 & 48 & 0 \\\hline 90 & 44 & 3,960 \\\hline 180 & 40 & 7,200 \\\hline 270 & 36 & 9,720 \\\hline 360 & 32 & 11,520 \\\hline 450 & 28 & 12,600 \\\hline 540 & 24 & 12,960 \\\hline 630 & 20 & 12,600 \\\hline 720 & 16 & 11,520 \\\hline 810 & 12 & 9,720 \\\hline 900 & 8 & 7,200 \\\hline 990 & 4 & 3,960 \\\hline 1,080 & 0 & 0 \\\hline\end{array}$$ ​
-Refer to Table 17-1. If Sydney and Matthew operate as a profit-maximizing monopoly in the market for water, how much profit will each of them earn, assuming that the two producers split the market equally?

• A)$5,760
• B)$6,480
• C)$6,300
• D)$12,960

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Definitions:

Sustainable Business

Sustainable business practices are those that meet the needs of the present without compromising the ability of future generations to meet their own needs, focusing on environmental, social, and governance criteria.

Profit Maximization

The process or strategy aimed at increasing a business's profits to the highest possible level.

Human Sustainability

An approach focusing on the long-term welfare and development of people within society, often emphasizing health, education, employment, and fair treatment.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, often including preventive care, prescriptions, and emergencies.