The firm has proposed charging a price of 100 for each unit, Ask an Expert

Economics

The Public Service Company of the Southwest is regulated by an elected state utility commission. The firm has total assets of $500,000. the demand function for its services has be estimated as:
P = $250 - $0.15Q

The firm faces the following total cost function:
TC = $25,000 + $10Q

(The total cost function does not include the firm's cost of capital.)

a) In an unregulated environment, what price would this firm charge, what output would be produced, what would total profits be, and what rate of return would the firm earn on its asset base?

b) The firm has proposed charging a price of $100 for each unit of output. If the price is charged, what will be the total profits and the rate of return earned on the firm's asset base?

c) The commission has ordered the firm to charge a price that will provide the firm with no more than a 10 percent return on its assets. What price should the firm charge, what output will be produced, ans what dollar level of profits will be earned?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M968400

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question short essay requiredjoseph stieglitz nobel

Question: Short Essay required Joseph Stieglitz, Nobel Laureate in Economics, has argued that the US should pay for higher education from the general tax coffers. Thus, he proposes a free for citizens higher education th ...

Question calculate the simple multiplier if the marginal

Question: Calculate the simple multiplier if the marginal propensity to consume is 0.4, investment rises $0.05 for every $1 billion increase in income, and net exports decline $0.08 for every $1 billion increase in incom ...

Question a website offers a place for people to buy and

Question: A website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent ex ...

Question - what is the role of timing in deciding to enter

Question - What is the role of timing in deciding to enter or exit a market? Firms decide to enter a market based on current and historical information, but time lags can change the economic environment. What are the ris ...

Question in the last few years the federal government cut

Question: In the last few years, the Federal government cut the GST (the federal sales tax on goods and services which Ontario later blended into the PST to create the HST) by two percentage points. The federal governmen ...

Question explain how labour productivity is determined in

Question: Explain how labour productivity is determined. In your answer address why human capital is considered to be so vital to lifting labour productivity levels. To illustrate your understanding provide an example. Y ...

Question analyze the various factors contributing to

Question: Analyze the various factors contributing to poverty and determine which single factor plays the most significant role. Provide a specific example to support your response. Discuss how developed nations contribu ...

Question an investor buys a coupon bond and holds it for

Question: An investor buys a coupon bond and holds it for exactly one year and then sells it in a secondary market prior to maturity. The investor buys it for $4,000, sells it one year later for $4,300 and receives a cou ...

Question why is or is not addiction or the war on drugs

Question: Why is or is not addiction, or the war on drugs more broadly, an appropriate topic for health economists to study? What insights or perspectives could economists add? The response must be typed, single spaced, ...

Question creating a successful sales force requires a good

Question: Creating a successful sales force requires a good fit with potential and current customers in your target market. Describe the target market for your business and explain how would you use this information to b ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert