Maria owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as she pumps more. Here is the cost she incurs to produce each bottle of water:

a. From this information, derive Maria’s supply schedule. Graph her supply curve for bottled water.

b. If the price of a bottle of water is €4, how many bottles does Maria produce and sell? How much producer surplus does Maria get from these sales? Show Maria’s producer surplus on your graph.

c. If the price rises to €6, how does quantity supplied change? How does Maria’s producer surplus change? Show these changes in your graph.

Transcribed Image Text:

Cost of first bottle 1 Cost of second bottle 3 Cost of third bottle 5 Cost of fourth bottle 7