Table 17-10
Imagine a Small Town in Which Only Two

question 185

Essay

Table 17-10
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:
$\begin{array}{|l|l|l|}\hline \begin{array}{l}\text { Quantity } \\\text { (in gallons) }\end{array} & \text { Price } & \begin{array}{l}\text { Total Revenue } \\\text { (and Total Profit) }\end{array} \\\hline 0 & \$ 12 & \$ 0 \\\hline 1 & \$ 11 & \$ 11 \\\hline 2 & \$ 10 & \$ 20 \\\hline 3 & \$ 9 & \$ 27 \\\hline 4 & \$ 8 & \$ 32 \\\hline 5 & \$ 7 & \$ 35 \\\hline 6 & \$ 6 & \$ 36 \\\hline 7 & \$ 5 & \$ 35 \\\hline 8 & \$ 4 & \$ 32 \\\hline 9 & \$ 3 & \$ 27 \\\hline 10 & \$ 2 & \$ 20 \\\hline 11 & \$ 1 & \$ 11 \\\hline 12 & \$ 0 & \$ 0 \\\hline\end{array}$

-Refer to Table 17-10. Discuss the difference between the monopoly outcome and the Nash equilibrium.

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Definitions:

Pretest Posttest

A research design that measures the effects of an intervention by comparing subject scores before and after the intervention.

Experimental Design

The blueprint for conducting a scientific study to ensure that it is valid and reliable; it includes planning, conducting, and analyzing an experiment.

Two-by-two

A 2x2 matrix or table used to categorize or compare data points based on two binary criteria, often used in research for analysis or decision-making.

Online Experiments

Research experiments conducted over the internet, allowing for widespread participation and data collection from diverse populations.