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.70b.80c.90d.120

Weekly Weekly Quantity Total Revenue (in litres) Price (and Total Profit) $12 $0 o 10 $11 $110 20 $10 $200 30 $9 $270 40 $8 $320 50 $7 $350 60 $6 $360 70 $5 $350 80 $4 $320 90 $3 $270 100 $2 $200 110 $1 $110 120 $0 $0