P w is the price per gallon of water. The city pays its fixed costs through a property tax that is collected from each household. Households pay this tax regardless of the amount of water they use. Most agricultural experts say that diseconomies of scale in farming begin when farms reach 400 acres. Over the past few years, there has been a steady decrease in agricultural prices and family farms have suffered the largest losses.
Electric utilities sell their output in a perfectly competitive market.
A certain rural Minnesota county, can provide a number of different household recycling pickup systems. Pickup can be offered to households on a weekly or biweekly basis, households can be required to sort materials or may be allowed to commingle, and the county can require that the materials be brought to the curbside or left in any accessible location. There are eight possible combinations of these three pickup variables that give all possible collection systems. To get more material recycled, the county must pay more. The graph above shows output versus cost for each recycling system.