What is the quantity where price equals marginal cost

Reference no: EM133440518

Questions: Under a single-rate electricity tariff for households and small businesses in Australia, a flat usage rate is charged for "blocks" of electricity consumed. The rate for the first block is higher than that for the second, and the lowest rate applies to electricity usage in excess of the second block. Suppose the inverse demand curve for a typical consumer is p = 30 - Q/3, where p is cents per kilowatt hour (kWh) and Q is kWh per day, and the profit-maximizing monopoly has a constant marginal and average cost of 20 cents per kWh.

What is the quantity where price equals marginal cost?
What would be the optimal quantity and price and the firm's profit, consumer surplus, and deadweight loss if the monopoly could set only a single price?

Reference no: EM133440518

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