Please help! Need to compromise following, please:
Power River sells spark to utilities in the east. Unfortunately, Power River’s spark has tall particulate calm and, therefore, the association is adversely influenced by state as well as internal regulations ruling fume as well as dirt emissions during the customers’ electricity-generating plants. Power River’s sum price as well as extrinsic price family are:
TC = $250,000 + $5Q + $0.0002Q^2
MC = $5 + $0.0004Q
where Q is tons of spark constructed per month as well as TC includes the normal rate of lapse upon investment.
1. Calculate Power River’s distinction during the profit-maximizing wake up turn if prices in the attention have been fast during $25 per ton and, therefore, P = MR = $25.
2. Calculate Power River’s optimal price, output, as well as distinction levels if the brand new state law regulation in the $300,000 bound price enlarge which cannot be upheld upon to customers.
Show all work & state any regulation used.
{ 1 comment… read it below or add one }
1.
Profit maximization occurs when MC=MR
so
MC=MR
5+.0004Q=25
.0004Q=20
Q=50,000
P=R-TC
P=25Q-(250,000+5Q=.0002Q^2)
P=25(50,000)-250,000-(5*50,000)-(.0002*2,500,000,000)
P=1,250,000-(1,000,000)
P=250,000
2.
So now TC=550,000+5Q+.0002Q^2
Do one yourself.