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Ernie owns a water pump.

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Ernie owns a water pump.;Because pumping large amounts of water;is harder than pumpig small amounts, the;cost of producing a bottle of water rises;as he pumps more.;Here is the cost he incurs to produce each;bottle of water;Cost of first bottle $1.00;Cost of second bottle $3.00;Cost of third bottle $5.00;Cost of fourth bottle $7.00;a. From this information, derive Ernie's supply;schedule. Graph his supply curve for bottled;water.;b. If the price of a bottle of water is $4, how many;bottles does Ernie produce and sell?;How much producer surplus does Ernie get from;these sales?;Show Ernie's producer surplus in your graph.;c. If the price rises to $6, how does quantity supplied;change?;How does Ernies producer surplus change?;Show these changes in your graph.;I also attached the worksheet with the graph.

 

Paper#28539 | Written in 18-Jul-2015

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