User Account

All Pages

Find the profit maximizing quantity

Assignment Help Basic Statistics
Reference no: EM132488581

Natural Monopoly: Suppose that PG&E is a natural monopoly. PG&E faces the following inverse demand curve for monthly demand for gas: P=260- ¼ Q. Suppose its marginal and average variable costs are a constant $10 per kilowatt hour.

a) Find the profit maximizing quantity and price if this natural monopolist was not regulated.

P=260-1/4Q

MC=10

AVC=10

MR=260-1/2Q

MC=MR

10=260-1/2Q Q=500 -> P=1/4(500)-260 P=135

b) Draw a graph for the monopolist, showing the demand curve, the marginal revenue curve, and the profit-maximizing output and price.

c) Now suppose that the natural monopolist is regulated as to price and quantity. Assume that average fixed costs at Q(reg) is $30. Find Q(reg) and P(reg). Show your answers in the graph above.

MR=MC=P

@REG P=ATC

40=260-1/4Q

Q=880--> P=40

Reference no: EM132488581

Questions Cloud

Suppose that for the production function : Is it possible that L = 3 and K = 6 also produces q = 10 for this production function? Why or why not?
What are the marginal products of band g : What are the marginal products of Band G? If Bis on the vertical axis, what is the marginal rate of technical substitution at each point on an isoquant?
For a perfectly competitive firm : For a perfectly competitive firm, profit maximization does not conflict with resource allocative efficiency. Do you agree? Explain your answer.
Draw a correctly labeled graph for joyce gas station : Joyce owns a gas station and monopolizes gas sales along a remote stretch of road. In February, Joyce stayed open even though she earned negative economic
Find the profit maximizing quantity : Find the profit maximizing quantity and price if this natural monopolist was not regulated.
Additional worker hired is more productive : Suppose a company has a policy to hire workers only when each additional worker hired is more productive than the previous worker hired.
What is david utility of not investing : What is David's utility of not investing? (In this and the following questions, include the wealth endowment in your calcuations.
Should you buy it and how long should you wait to sell it : Should you buy it and how long should you wait to sell it (consider only integer years), and how much money will you receive at the time of its sale?
What is the annualized rate of return steve earned : Received interest income of $40.00, and then immediately sold the bond for $990.00. What is the annualized rate of return Steve earned on this investment?

Reviews

Write a Review

Basic Statistics Questions & Answers

  Comment on the usefulness of the equation to make prediction

Develop a prediction equation. Comment on the usefulness of the equation to make predictions (SEE, No Image, F-test, and slope coefficient significance).

  Students study an average

Assuming these data are normally distributed, what is the z score for students studying 45 minutes per week?

  List of the number correct for each

When only two treatments are involved, ANOVA and the Student t test (Chapter 11) result in the same conclusions. Also, . As an example, suppose that 14 randomly selected students were divided into two groups, one consisting of 6 students and the othe..

  Compute the estimated standard error and t statistic

H: μ = 50. A sample of 25 scores is selected and the mean is M = 55.Assuming that the sample variance is s2 = 100, compute the estimated standard error and the t statistic.

  Proportion of non sell-able items

We are 95% confident that the proportion of non sell-able items for Whole Fruits is anywhere between 6.4% and 15.6% HIGHER than the proportion of non sell-able items for Green Grocer.

  Let x denote the number of white chips in the sample and y

an urn contains four red chips three white chips and two blue chips. a random sample size of 3 is drawn without

  Comparison of the degree of linear correlation are

comparison of the degree of linear correlation are considered most accurate in terms ofa. the standardized regression

  What is the mean annual employer cost per participant

Suppose the annual employer 401(k) cost per participant is normally distributed with a standard deviation of $625, but the mean is unknown.

  Use a quasi experimental rather than an experimental design

How do quasi-experimental designs differ from true experiments?- Under what circumstances would a researcher use a quasi-experimental rather than an experimental design?

  Determine the probability of a type i error

Please determine the probability of a type I error for the following .65 , .70 , .75 , .80

  Banking machine customer

On a certain banking machine customer arrives at an average 15 per hour. a. What is the probability that 12 customers will use the machine in the next hour?

  Devise a method for computing the sample variance

For a sample of n participants, the relative frequencies are f0/n = .2, f1/n = .4, f2/n = .2, f3/n = .15, and f4/n = .05. The sample mean is 1.45.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd