The following table shows the demand for water and cost conditions for the New South Springdale Water Utility, a pure monopoly.

a. Complete the table.

b. What is true about the relationship between marginal revenue and marginal costs when profit is the greatest?
c. Suppose the government imposed a tax on the firm of $103, which the firm had to pay even if it went out of business. What would be the profit-maximizing level of output? What would happen to profits? Would the firm stay inbusiness?

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Total Marginal Marginal Average Quanity Price (gallons) (per gallon Revenue Revnu Costs Total Costs Prt $1.252 $1.241 $1.231 $1.221 $1.212 $0.15 Il 100 101 102 103 104 $1.28 $1.27 $1.26 $1.25 $1.24 $0.18 $0.21 0.23 $0.26