MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
9th Edition
ISBN: 9781259896422
Author: Baye
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 21PAA
To determine
To know:the number of kilowatt- hours of electricity each firm will produce and supply and the per kilowatt hour
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The French government announced plans to convert state-owned power firms EDF and GDF into separate limited companies that
operate in geographically distinct markets. BBC News reported that France's CFT union responded by organizing a mass strike, which
triggered power outages in some Paris suburbs. Union workers are concerned that privatizing power utilities would lead to large-scale
job losses and power outages similar to those experienced in parts of the eastern coast of the United States and parts of taly in 2003.
Suppose that prior to privatization, the price per kilowatt hour of electricity was Co.f and that the inverse demand for electricity in
each of these two regions of France is estimated as P-1.4 -0.0010 in euros). Furthermore, to supply electricity to its particular region
of France, it costs each firm ag - 110 + 010 in euros). Once privatized, each firm will have incentive to maximize profits.
Determine the number of kilowatt hours of electricity each firm wil produce and…
The French government announced plans to convert state-owned power firms EDF and GDF into separate limited companies that
operate in geographically distinct markets. BBC News reported that France's CFT union responded by organizing a mass strike, which
triggered power outages in some Paris suburbs. Union workers are concerned that privatizing power utilities would lead to large-scale
job losses and power outages similar to those experienced in parts of the eastern coast of the United States and parts of Italy in 2003.
Suppose that prior to privatization, the price per kilowatt hour of electricity was €0.14 and that the inverse demand for electricity in
each of these two regions of France is estimated as P=1.43 -0.001Q (in euros). Furthermore, to supply electricity to its particular
region of France, it costs each firm CQ) = 110+ 0.14Q (In euros). Once privatized, each firm will have incentive to maximize profits.
Determine the number of kilowatt hours of electricity each firm will…
The French government announced plans to convert state-owned power firms EDF and GDF into separate limited companies that
operate in geographically distinct markets. BBC News reported that France's CFT union responded by organizing a mass strike, which
triggered power outages in some Paris suburbs. Union workers are concerned that privatizing power utilities would lead to large-scale
job losses and power outages similar to those experienced in parts of the eastern coast of the United States and parts of Italy in 2003.
Suppose that prior to privatization, the price per kilowatt hour of electricity was €0.16 and that the inverse demand for electricity in
each of these two regions of France is estimated as P= 1.38 - 0.001Q (in euros). Furthermore, to supply electricity to its particular
region of France, it costs each firm C(Q) = 100 + 0.16Q (in euros). Once privatized, each firm will have incentive to maximize profits.
Determine the number of kilowatt hours of electricity each firm will…
Knowledge Booster
Similar questions
- The French government announced plans to convert state-owned power firms EDF and GDF into separate limited companies that operate in geographically distinct markets. BBC News reported that France's CFT union responded by organizing a mass strike, which triggered power outages in some Paris suburbs. Union workers are concerned that privatizing power utilities would lead to large-scale job losses and power outages similar to those experienced in parts of the eastern coast of the United States and parts of Italy in 2003. Suppose that prior to privatization, the price per kilowatt hour of electricity was €0.14 and that the inverse demand for electricity in each of these two regions of France is estimated as P=1.43 -0.001Q (in euros). Furthermore, to supply electricity to its particular region of France, it costs each firm C(Q) = 110+ 0.14Q (in euros). Once privatized, each firm will have incentive to maximize profits. Determine the number of kilowatt hours of electricity each firm will…arrow_forwardThe Energy Information Administration's forecast that world crude oil demand will likely outpace supply by 20 million barrels this year has also increased market uncertainty and driven up prices. Companies in the US steel and alumina industries have been urging the loosening of import restrictions because they fear running short of petrol. Despite the potential market effects, analysts believe that most steel and alumina companies won't be significantly impacted because crude oil only accounts for a small fraction of their overall costs. In general, rising crude oil prices are the result of a mix of supply and demand issues, market uncertainty, and other reasons. The price of this significant commodity will undoubtedly continue to be significantly influenced by global supply and demand dynamics, even though the precise trajectory of prices in the future is difficult to forecast. 1) Draw a graph to show this information.arrow_forwardThe Hewl-Pact Company produces a popular printer than prints over 100 pages per minute. It recently announced that it was introducing a lower priced model of the printer that can print 30 pages per minute. While not revealed to the public, it turns out that it costs the company more to produce the lower priced product. The two models are identical except for a $20 internal part for the low-priced model that slows the printer from 100 to 30 pages per minute. Provide an economic explanation for why the company decided to produce a new lower priced, but more costly, model of the printer.arrow_forward
- FOREIGN OBJECTS — AND INSECTS During 2017 inspections of the Mars Inc. canning facility in Columbus, Ohio, where Pedigree, Iams and Cesar pet foods are manufactured, along with other brands, Mars told inspectors it was hearing consumer complaints about foreign objects — including insects — in the pet food.But the company insisted it was working to fully implement corrective actions.Pest control records at the facility noted damaged cans covered in flies, and dozens of employees had complained about cockroaches in the area, especially at night. Different employees described seeing “multiple roaches,” an “invasion of roaches,” “roaches everywhere” and even “millions of roaches” — which we hope was an exaggeration.Inspectors from the U.S. Food and Drug Administration (FDA) themselves observed 2 live roaches. The FDA stressed the seriousness of the pest problem, and the company “promised correction.” Around 2015, we started hearing reports of so-called “wires” or plastic…arrow_forwardThe Friendly Greetings greeting card company outsources printing to a nearby printing shop, which charges a $1200 fixed charge to start producing a design of card, then $0.30 for each card produced. The printing shop turns around production orders quite quickly, so lead time can be considered negligible. Demand for birthday cards of a certain classic design has long been at a constant and steady rate of 25,000 cards per year. Friendly Greetings stores cards in its own warehouse. The company estimates holding costs to be 5 cents per card per year, including variable warehousing costs and the opportunity cost of capital. The company’s current ordering policy is not necessarily optimal. They place an order for 15,000 cards when their stock of cards approaches zero. How much on average do they spend annually on fixed production charges for the birthday card design?arrow_forwardCan Huawei Overcome Roadblocks in its Quest for Global Markets? Huawei Technologies Ltd. (Huawei) has been integral in the global markets of the US, Australia, and the European Union for its telecom equipment. In October 2019, Shenzhen-based networking and telecommunications equipment and services company Huawei Technologies Ltd. (Huawei) unveiled its 14-port and 3-D Hexa-beam antennas to address the challenges associated with the 4.5G and 5G era at the 5th Annual Global Antenna and Active Antenna Unit Forum held in Paris. Commenting on the launch, Zhang Jiayi, president of Huawei’s antenna business unit, said, “Huawei focuses on satisfying the requirements of operators in the MBB (mobile broadband) era.” Founded in 1987 in Shenzhen by Ren Zhengfei (Ren), a former military engineer in the People’s Liberation Army (PLA) – the unified organization of the armed forces of China, Huawei started as a sales agent for a Hong Kong-based company selling private branch exchange (PBX)…arrow_forward
- The Reliable Aircraft Company manufactures small, pleasure-use aircraft. Based on past experience, sales volume appears to be affected by changes in the price of the planes and by the state of the economy as measured by consumers' disposable personal income. The following data pertaining to Reliable's aircraft sales, selling prices, and consumers' personal income were collected: Year Aircraft Sales 2006 2007 2008 0 0.22 -0.38 -0.22 The arc price elasticity of demand between 2006 and 2007 is: -8.11 -3.53 525 3.53 450 0 400 The arc income elasticity of demand between 2007 and 2008 is: Average Price (Dollars) 16,800 8,000 8,000 Disposable Constant Income (In constant 2006 dollars, billions) 610 610 Aircraft Sales 2009 Forecast: Assume that these estimates are expected to remain stable during 2009. Forecast 2009 sales for Reliable assuming that its aircraft prices remain constant at 2007 levels and that disposable personal income will increase by 7%. Also assume that the arc income…arrow_forwardhelp asap please. i will upvote. thanksarrow_forwardSamsung is a South Korean company and its global success story was started with the launch of the Galaxy S series of smartphones by the end of 2000. Now, Samsung is included among top 5 companies that are manufacturing electronic apparatuses in all over the world. Samsung is considered as one of the main suppliers of electronic goods such as flash memory, chips, semiconductors, batteries and hard drive to other manufacturing companies such as Sony, Nokia etc. The company is also providing a wide range of electronic products to consumers, like smartphones, tablets, audio sounds, smart switches, refrigerators, air solutions, monitors etc. During COVID-19 pandemic, Samsung supported the global fight with corporate social responsibility (CSR) initiatives such as the smart factory program and also providing training to human resources. Samsung has also been working on different projects with United Nations Development Program (UNDP) for achieving Sustainable Development Goals, for example,…arrow_forward
- At these levels of output the marginal revenue in the manufactured items market is and the marginal revenue in the semimanufactured raw materials market is . At these prices, the price elasticity of demand in the manufactured items market is and the the price elasticity of demand in the semimanufactured raw materials market is . (Hint: ED=PMR−P��=�MR−�) What are the total profits if the company is effectively able to charge different prices in the two markets? . If the company is required by law to charge the same per-ton rate to all users, the new profit-maximizing level of price and output are per ton and tons respectively. The total profits in this situation is .arrow_forwardMoses Inc. is a small electric company that provides power to customers in a small rural area in the Southwest. The company is currently maximizing its profits by selling electricity to consumers at a price of $0.15 per kilowatt-hour. Its marginal cost is $0.05 per kilowatt-hour, and its average cost is $0.15 per kilowatt-hour. A government regulator is considering a proposal to regulate the firm’s price at $0.05 per kilowatt-hour. Would such a policy improve social welfare? Explainarrow_forwardMost public utilities (gas, electricity, water, and local telephone companies, for instance) are subject to rate of return regulation, under which a firm is allowed to choose its price, subject to its proving that it is not earning too much money. Typically, the firm is allowed to cover its expenditures for labor and material exactly and to earn a "fair" rate of return on its capital investment. Can you think of any problems with this sort of regulatory scheme? In particular, what do you think that this plan does to the firm's incentives to substitute capital for labor?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning