Profit-maximizing amount, the optimal price
Not what you're looking for?
The second largest public utility in the nation is the sole provider of electricity in 32 counties of southern Florida. To meet monthly demand for electricity in these counties, which is represented by the inverse demand function, P = 1000 - 5 Q, the utility company has set up two electric generating facilities: Q â? kilowatts are produced at facility 1 and Qâ?? kilowatts are produced at facility 2 (so Q = Qâ?+ Q â?? & P = 1000 - 5(Q â? + Q â??)). The costs of producing at each facility are given by
Câ? (Q â?) = 10,050 + 5 Qâ?² and Câ?? (Q â??) = 5,000 + 2 Qâ?? ², respectively.
Determine the profit-maximizing amounts of electricity to produce at the two facilities, the optimal price, and the utility company's profits.
Purchase this Solution
Solution Summary
This solution provides the profit-maximizing amount, the optimal price, and Company's profits.
Solution Preview
Below, find the steps necessary to determine the profit-maximizing amounts of electricity, the optimal price, and the utility company's profit:
I use Q for Q1 and q for ...
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance
These questions will test you on your knowledge of finance.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.