Table 17-1
Imagine a small town in which only two residents, Matthew and Anna, own wells that produce water for safe drinking. Each Saturday, Matthew and Anna work together to decide how many litres of water to pump, bring the water to town, and sell it at whatever price the market will bear. To keep things simple, suppose that Matthew and Anna can pump as much water as they want without cost; therefore, the marginal cost of water equals zero.
The weekly town demand schedule and total revenue schedule for water is reflected in the table.

-Refer to Table 17-1.If the market for water was perfectly competitive instead of monopolistic,how many litres of water would be produced and sold
A)70
B)80
C)90
D)120

Question

Table 17-1
Imagine a small town in which only two residents, Matthew and Anna, own wells that produce water for safe drinking. Each Saturday, Matthew and Anna work together to decide how many litres of water to pump, bring the water to town, and sell it at whatever price the market will bear. To keep things simple, suppose that Matthew and Anna can pump as much water as they want without cost; therefore, the marginal cost of water equals zero.
The weekly town demand schedule and total revenue schedule for water is reflected in the table.

-Refer to Table 17-1.If the market for water was perfectly competitive instead of monopolistic,how many litres of water would be produced and sold
A)70 
B)80 
C)90 
D)120

Quizplus · Accepted Answer

In a perfectly competitive market, the quantity produced and sold is where marginal cost equals marginal revenue, which typically results in a higher quantity than in a monopolistic market.

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