5. Problems and Applications Q5 Van owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as he pumps more. Here is the cost he incurs to produce each bottle of water: Cost of first bottle: $1 Cost of second bottle: $3 Cost of third bottle $5 Cost of fourth bottle: $7 From this information, complete the following table by deriving Van's supply schedule. Quantity Supplied Price More than $7 55 to $7 53 to 55 Sl to 53 $1 or less Based on Van's willingness to sell, plot his supply curve as a step function on the following graph using the orange points (square symbol). Be sure to plot your first point at (0, 0). ? 10 9 Van's Supply 6 Price $4 Price of Water 5 Quantity Sold 3 2 Producer Surplus 1 0 0 Quantity of Water Suppose the price of a bottle of water is 4. Use the black tire (plus symbol) to draw a price line at 54. Next use the grey point (star symbol) to indicate how many boeties of water van will produce and sell at that price. Finally, use the purple point (diamond symbol) to shade the area that represents Van's producer surplus, In this case, Van receives in producer surplus from his water sales If the price rises to 56, van now sells bottles of water. This his producer surplus tos Grado It Now Save & Continue Continue without saving