In the first table below, you will find the (marginal) willingness to pay for purified water by the only three consumers in this market. In the second table, you will find the marginal cost of (additional) units of output for the only two producers of purified water in this market.

a) You have obtained the competitive equilibrium in this market. (You can do it again.) Now suppose that the purified water comes in plastic containers that the city needs to recycle, at a cost of $ .2 per container. Is the competitive output efficient, too high, or too low? If it is not efficient, propose (and quantify) a measure the city can take to lead the market to an efficient outcome.

X sers/Owner/Desktop/ECO/Assignment%208-9.pdf + = [ Pageview A Read aloud I V D GALLONS ANNE BOR CARLISLE $1.5 $1.1 $1.8 $1.2 $.9 $1.3 $.8 $1.1 $.5 $.6 $.9 $.4 $.5 $.7 $.2 $.4 $.5 GALLONS FIRM 1 FIRM 2 $.3 S.1 $.4 $.3 5.5 5.4 S.6 S.6 $.8 5.7 5.9 S.9 $1.0 $1.0