Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The monthly demand equation for an electric utility company is estimated to be p = 72 - (10 ) x, where p is measured in

image text in transcribed
image text in transcribed
The monthly demand equation for an electric utility company is estimated to be p = 72 - (10 ) x, where p is measured in dollars and x is measured in thousands of killowatt-hours. The utility has fixed costs of $9,000,000 per month and variable costs of $32 per 1000 kilowatt-hours of electricity generated, so the cost function is C(x) = 9 . 10 + 32x, (a) Find the value of x and the corresponding price for 1000 kilowatt-hours that maximize the utility's profit. (b) Suppose that the rising fuel costs increase the utility's variable costs from $32 to $40, so its new cost function is C, (x)=9 . 10" + 40x. Should the utility pass all this increase of $8 per thousand kilowatt-hours on to the consumers? (a) Find the value of x and the corresponding price for 1000 kilowatt-hours that maximize the utility's profit. (Type an integer or a decimal.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Calculus And Its Applications

Authors: Larry Goldstein, David Lay, David Schneider, Nakhle Asmar

14th Edition

0134437772, 9780134437774

More Books

Students also viewed these Mathematics questions