Ali owns a pump of water in his village. Since pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water increases as he pumps more. Here is the cost he incurs to produce each bottle of water:

Cost of first water bottle

$1

Cost of second water bottle

3

Cost of third water bottle

5

Cost of fourth water bottle

7

a.From this information, derive Ali'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 Ali produce and sell? How much producer surplus does Ali get from these sales? Show Ali's producer surplus in your graph.

If the price rises to $6, how does quantity supplied change? How does Ali's producer surplus change? Show these changes in your graph