At equilibrium price and quantity, how much total revenue will bottled water suppliers receive in a given year?
Suppose that the U.S. market for bottled water is modeled as follows:
S = MSC = 1 + 0.3Q D = MSB = 5 – 0.1Q,
whereQ is billions of gallons per year and MSC and MSB are in dollars per gallon.
Total Revenue (TR) is defined as P * Q. Therefore, at equilibrium the TR for the bottle water suppliers would be $4 *10 billion gallons, or $40 billion per year.
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