Every house in a small town has a well that provides water at no cost. However, if the town wants more than 10,000 gallons a day, it has to buy the extra water from firms located outside of the town. The town currently consumes 9,000 gallons per day. 1. Draw the linear demand curve. 2. The firms' supply curve is linear and starts at the origin. Draw the market supply curve, which includes the supply from the town's wells. 3. Show the equilibrium. What is the equilibrium quantity? What is the equilibrium price?

Answer:1. The curve will be in the horizontal axis at price 0.2. The curve will be in the horizontal axis and then it will have a positive slope starting on 10000 gallons.3. The equilibrium quantity is 9000 at price 0.Step-by-step explanation:1. A demand curve has the price in the Y axis (vertical axis) and the quantity in the X axis (horizontal axis). The quantity of water currently consumed is 9000 gallons which is lower than 10000 gallons, so all the water demanded comes from the wells. Which means that the price is 0 for the water consumpsion from 0 to 10000. Drawing that in an XY chart, you will have an horizontal line on the X axis. See attached picture "Demand curve".2. The wells can supply water at no costs up to 10000 gallons, after that extra water is needed from outside suppliers. That curve is represented as a line with a positive slope starting from 10000 gallons. See attached picture "Supply curve".3. The equilibrium is selected according to currently consumes. The equilibrium point will be 9000. If we locate this point in the supply curve we will see that the water can be supplied only by the wells, so the equilibrium price will be 0. See attached picture "Equilibrium curve".