2. Problems and Applications Q5 Jake 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 he pumps more. Here is the cost he incurs to produce each bottle of water: Cost of first bottle: $2 Cost of second bottle: $4 Cost of third bottle: $6 Cost of fourth bottle: $8 From this information, complete the following table by deriving Jake's supply schedule. Price Quantity Supplied More than $8 $6 to $8 $4 to $6 $2 to $4 $2 or less Based on Jake's willingness to sell, plot his supply curve as a step function on the following graph using the orange points (square symbol). Be sure to plot your first point at (0,0). 10 9 Jake's Supply 8 7 f 6 Price = $5 Price of Water Quantity Sold 3 2 Producer Surplus 1 0 0 4 3 Quantity of Water Suppose the price of a bottle of water is $5. Use the black line (plus symbol) to draw a price line at $5. Next use the grey point (star symbol) to indicate how many bottles of water Jake will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Jake's producer surplus. Suppose the price of a bottle of water is $5. Use the black line (plus symbol) to draw a price line at $5. Next use the grey point (star symbol) to indicate how many bottles of water Jake will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Jake's producer surplus. In this case, Jake receives $ in producer surplus from his water sales. If the price rises to $7, Jake now sells bottles of water. This his producer surplus to $