Determine the optimal price, Microeconomics

The largest public utility company in New South Wales (NSW) is the sole provider of electricity across all regions in the state. The monthly demand for electricity in NSW is given by the inverse demand function P = 1,000 - 5Q. The electricity company has set up two electric generating facilities: Q1 kilowatts are produced at facility 1 and Q2 kilowatts are produced at facility 2 (so Q = Q1 + Q2). The costs of producing electricity at each facility are given by C1(Q1) = 10,050 + Q12 and C2(Q2) = 5,000 + 2Q22, respectively.

a. Determine the profit-maximising amounts of electricity to produce at the two facilities.

b. Determine the optimal price.

c. Determine the utility company's profits.

Posted Date: 2/21/2013 1:21:06 AM | Location : United States







Related Discussions:- Determine the optimal price, Assignment Help, Ask Question on Determine the optimal price, Get Answer, Expert's Help, Determine the optimal price Discussions

Write discussion on Determine the optimal price
Your posts are moderated
Related Questions
Black Economy Public Policy Interface: The above mode of functioning and expansion of the black economy became an important basis for policy disruption in India. The undergrou

What does the basic neoclassical, or traditional, model of economics assume about markets? It supposes that markets are perfectly competitive and smoothly functioning, and thos

characteristics and models of oligopoly by Sweezy,cournot and edgework

explain normal profits


explain how macro and micro issues may be represented using production possibility curve

the price elasticity for gizmos is known to be 1, if sellers of gizmos increase their

Compensated Demand Curve: Compensated demand function for a commodity (say x1) of an individual consumer represents demand quantity for that good (which is purchased by the co

Explain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the commod

what are the solutions to cost push inflation