Table 17-2 Imagine a Small Town in Which Only Two Residents, Abby

question 334

Multiple Choice

Table 17-2
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:
-Refer to Table 17-2. Suppose that Abby and Brad work together to operate as a profit-maximizing monopolist. How many gallons of water will be produced and sold?

• A)4 gallons
• B)5 gallons
• C)6 gallons
• D)8 gallons

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Definitions:

Table

An arrangement of data in rows and columns that organizes and displays information clearly and systematically.

Proportion

The relationship or ratio between parts of a whole, often referring to balance and symmetry in design or composition.

Hurricanes

Powerful tropical storms characterized by strong winds, heavy rain, and can lead to significant destruction, often occurring in the Atlantic Basin.

Gulf Coast States

Refers to the states in the United States that border the Gulf of Mexico, including Texas, Louisiana, Mississippi, Alabama, and Florida.