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P =80 - 2Q where P = price per 1000 gallons ($/1000g) Q = quantity of water in units of 1000 gallons 1. (10 pts)
P =80 - 2Q where P = price per 1000 gallons ($/1000g) Q = quantity of water in units of 1000 gallons 1. (10 pts) Illustrate the figure and show how you calculate (a) the quantity (Q") of water this consumer would optimally choose, (b) the marginal value received for this last unit of quantity, and (c) the total benefit (value) they would receive as a result IF the price offered to them is $0.00 per 1000 g? a. Q* = 1000 gallons b. Marginal value at Q* $ dollars per 1000 gallons c. Total benefit = $ dollars (in this case it would also equal the consumer surplus and the total net benefit as well)
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