Urban water supply has the Average Cost function AC =150/Q, and demand function Q = 18-4P; Q is quantity of water output, and P is unit price of water. (i) Obtain the Total Cost and Total Revenue Functions of water utility. (ii) Find the optimal output (Q*) of water utility. (iii) Find the optimal price (P*) of water utility.

Urban water supply has the Average Cost function AC =150/Q, and demand function Q = 18-4P; Q is quantity of water output, and P is unit price of water. (i) Obtain the Total Cost and Total Revenue Functions of water utility. (ii) Find the optimal output (Q) of water utility. (iii) Find the optimal price (P) of water utility.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 2E

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