A power plant has an annuitized investment cost of $150/kW-yr, fixed O&M costs of $22/kW-yr, a heat rate of 6,280 Btu/kWh, and variable O&M costs of 2.5/kWh. The fuel for the power plant costs $3/MMBtu

(a) Write the production cost function of power plant.

(b) Describe the returns to scale exhibited by this power plants production function.

(c) What should the power plant bid in the wholesale electricity market ($/kWh or $/MWh) assuming the power plant is a price taker (e.g. the firm cannot exert any market power)