-The Table Above Gives the Demand and Supply Schedules for Bottled

question 46

Essay

-The table above gives the demand and supply schedules for bottled spring water in Springsboro. Assume that the only people who benefit from spring water are the people who drink it and the only people who bear the cost of bottled spring water are the people who produce it.
a) Draw the market demand and market supply curves. What are the equilibrium price and equilibrium quantity of spring water? Is this equilibrium efficient? Explain.
b) What is the maximum price that consumers are willing to pay for the 400th bottle? What is the minimum price that producers are willing to accept for the 400th bottle? Explain.
c) Are 400 bottles a day less than or greater than the efficient quantity? Explain your answer.
d) If the market for spring water is efficient, what is the consumer surplus? Show it on your graph. What is the producer surplus? Show it on your graph.
e) If spring water bottlers produce 400 bottles a day, is there a deadweight loss? If yes, what is it? Explain your answer using your graph.

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Definitions:

Presentation

The act of showing and explaining the content of a topic to an audience or listener.

Formal

Following established conventions or requirements; opposite of informal.

Unfavourable Response

A reaction or reply that is negative or not supportive, often received after presenting an idea or proposal.

Conclusions

The final part of something, typically a document, speech, or piece of reasoning, summarizing the main points or outcomes.