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

question 45

Multiple Choice

Table 17-1
Imagine a small town in which only two residents, Rochelle and Alec, own wells that produce safe drinking water. Each week Rochelle and Alec 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 Rochelle and Alec 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 table below:
-Refer to Table 17-1. If Rochelle and Alec operate as a profit-maximizing monopoly in the market for water, what price will they charge?

• A)$25
• B)$30
• C)$35
• D)$40

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Definitions:

Deviant

An individual or behavior that deviates from societal norms, often viewed negatively.

Social Control

Mechanisms, strategies, and institutions by which societies regulate individual behavior to maintain order and conformity.

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Medical doctors who specialize in the diagnosis, treatment, and prevention of mental illnesses and emotional disorders, capable of prescribing medication.