Practicing Success
Practicing Success
CUET Preparation Today
| Suppose there is a village located far-away. There is only one well in the village and villagers are dependent on this well for fulfillment of their water requirements. This well is owned by an individual and villagers will have to purchase the water from him. In order to purchase the water, the customer will have to withdraw the water by themselves from the well. |
| What are the costs faced by the owner of the well? |
Cost of drawing water from well Cost of attracting customers No cost Both 1 and 2 |
| No cost |
| No cost is faced by the owner of the well. It’s clearly mentioned in the paragraph above that a customer who wants to purchase water will have to draw the water from the well themselves and there is no need of attracting the customers as water is an essential commodity and thus required by all. So, this is the case of a monopolist with zero costs. |
