Question
Hydro Ottawa is the only electricity provider in Ottawa. It has two plants generating electricity. The two plants have the following marginal costs. MC1 =
Hydro Ottawa is the only electricity provider in Ottawa. It has two plants generating electricity. The two plants have the following marginal costs.
MC1 = Q1
MC2 = 2Q2
The inverse demand for electricity in Ottawa isp = 600 - 0.5q whereqis the total electricity produced in both plants (q = q1+ q2).
Answer the following questions.
- How much electricity will Hydro Ottawa produce in each of its plants?
2. What price will Hydro Ottawa charge?
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
