Your city is encouraging the use of reusable, eco-friendly water bottles to cut down on plastic waste. In the current local market, a reusable bottle sells for about $5, and each month about 10,000 bottles are sold. Surveys show some consumers are willing to pay up to $8 for these bottles, while some producers would have supplied them for as low as $3 each.
Local environmental groups want to know if this market is working efficiently or if intervention might help. Some producers argue for a price floor of $6 per bottle to help small businesses earn more.