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

question 171

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. Suppose the town enacts new antitrust laws that prohibit Sydney and Matthew from operating as a monopoly. What will be the price of water once Sydney and Matthew reach a Nash equilibrium?

• A)$12
• B)$16
• C)$20
• D)$24

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Definitions:

Synaptic Vesicles

Small sacs within a presynaptic neuron that store neurotransmitters, which are released into the synaptic cleft to transmit signals to a postsynaptic cell.

Receptor Sites

Specific locations on the surface of a cell or within a cell where molecules, such as neurotransmitters or hormones, can bind to initiate a cellular response.

Potassium Ions

Positively charged ions (K+) that are vital for various physiological processes, including nerve signal transmission and muscle contraction.

Myelin Sheaths

Insulating layers of fatty material that surround the axons of many neurons, enhancing the speed at which electrical impulses are conducted.