The Market Demand for the Output of a Public Utility$$Q D = 250 - 2 P$$

Question

Examlex · Accepted Answer

The Answer is (i)

M R = 125 - Q = 35 - 0.10 Q = L M C

so

Q = 100 , P = 75

, and profit is
equal to

( 75 ) ( 100 ) - ( 100 ) ( 50 - \{ 0.125 \} \{ 100 \} ) = 3,750

ext { (ii) } P = 125 - 0.50 Q = 50 - 0.125 Q = L A C ext { so } Q = 200 ext { and } P = 25

(iii)

P = 125 - 0.50 Q = 35 - 0.10 Q = L M C

so

Q = 225 , P = 12.50

, and profit
is equal to

( 12.50 ) ( 225 ) - ( 225 ) ( 50 - \{ 0.125 \} \{ 225 \} ) = - 2,109.375

The Market Demand for the Output of a Public Utility $Q D = 250 - 2 P$