Homework: Homework 7 Score: 0 of 2 pts Concept: Profit Maximization Graph 1 12 o

Question

Homework: Homework 7 Score: 0 of 2 pts Concept: Profit Maximization Graph 1 12 of 19 (17 complete) HW Score: 87.5%, 26.25 of 30 pt Question Help The graph to the right depicts the demand for electricity from a local utility along with the average total cost and marginal cost of producing electricity Suppose the local utlity is a monopoly What is the profit maximizing quantity of electricity? million kilowatt hours per day. (Enter a numeric response using an integer) MC 0 32 ATC 02g 024 020 40 100 Quantity of kilowatt hours (per day in millions) Enter your answer in the answer box and then click Check Answer. 2 parts Clear All

Explanation / Answer

Since the monoplist profit maximising condition of monopoly is

MR=MC

Corresponding to this intersection, the quantity will be determined.

Hence profit maximising electricity is 40 million Kw hour.

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