If Peter was willing to produce 5 tons of avocados at $0.50 per avocado, ceteris paribus, the economic principle Peter would be violating is the principle of Optimal Production Rule.
Recall that price is best fixed at the point where marginal revenue is equal to marginal cost. It is assumed that being rational, that point is already set at $1/Avocado.
What would happen to the supply of avocados if the cost of water went up where Jim, Tanya, and Peter live?
If the cost of water went up where Jim, Tanya and Peter live, that means the total cost will go up. This will affect the rate of production negatively (in the short run). When cost of production goes up, supply goes down.
What is a supply schedule?
A table that lists the quantity delivered at each price is called a supply schedule.
A graph that displays the amount delivered at each price is called a supply curve.
Because it is a graphical depiction of the supply schedule, the supply curve is occasionally referred to as a supply schedule.
The supply schedule for the entire market is attached accordingly.
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