Many tourists climb
Many tourists climb Mt. Fuji in Japan, which is one of the world’s highest mountains: over 12,000 feet or 3,700 meters tall. Tourists can purchase water along the route at huts. The higher a tourist climbs up the mountain, the higher is the price of 1 liter of water. So a tourist pays more for 1 liter of water at the 10,000′ hut than at the 7,000′ hut. Assume water sellers on Mt. Fuji are profit-maximizers. And (eventhough it’s unrealistic) assume perfect competition.
a. (5 points) Water sold at huts is carried up the mountain by workers, not by vehicles. Referring to the costs of production, explain why sellers would charge a higher price for 1 liter of water at a higher elevation.
, which is one of the world’s highest mountains: over 12,000 feet or 3,700 meters tall. Tourists can purchase water along the route at huts. The higher a tourist climbs up the mountain, the higher is the price of 1 liter of water. So a tourist pays more for 1 liter of water at the 10,000′ hut than at the 7,000′ hut. Assume water sellers on Mt. Fuji are profit-maximizers. And (eventhough it’s unrealistic) assume perfect competition.
a. (5 points) Water sold at huts is carried up the mountain by workers, not by vehicles. Referring to the costs of production, explain why sellers would charge a higher price for 1 liter of water at a higher elevation.
