8. Consumer and Producer Surplus Suppose Felix is the only seller in the market for bottled water and Carlos is the only buyer. The following lists show the value Carlos places on a bottle of water and the cost Felix incurs to produce each bottle of water: Carlos's Value $7 Value of first bottle: Value of second bottle: $5 Value of third bottle: $3 Value of fourth bottle: $1 Felix's Costs Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle: $5 Cost of fourth bottle: $7 The following table shows their respective supply and demand schedules: Price More than $7 $5 to $7 Quantity Supplied Quantity Demanded $3 to $5 $1 to $3 MNH 4 3 0 1 2 2 1 3 $1 or less 0 4 Use Felix's supply schedule and Carlos's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Enter these values in the following table. Price Quantity Supplied Quantity Demanded 2 4 6 A price of brings supply and demand into equilibrium. At the equilibrium price, consumer surplus is S ,producer surplus is S and total surplus is $ If Felix produced and Carlos consumed one less bottle of water, total surplus would If instead, Felix produced and Carlos consumed one additional bottle of water, total surplus would