Question

# A power plant’s fuel costs are given by: TC=10+4Q+2Q^2. Here Q represents kilowatt-hour of electricity produced....

A power plant’s fuel costs are given by: TC=10+4Q+2Q^2. Here Q represents kilowatt-hour of electricity produced. The firm can sell electricity on the wholesale market for \$20 per kilowatt-hour.

Calculate the total fixed costs, average total costs, and marginal cost functions (you can just use a table for the first 6 values), as well as marginal revenue.

TC = 10 + 4Q +2Q2

TFC = 10 (Total fixed cost is the part of TC which does not depends on the Q)

ATC = TC/Q

ATC = (10 + 4Q +2Q2) / Q

ATC = (10/Q) + 4 + 2Q

MC = 4 + 4Q

 Quantity TFC TC ATC MC 0 10 10 1 10 16 16 6 2 10 26 13 10 3 10 40 13.33 14 4 10 58 14.5 18 5 10 80 16 22 6 10 106 17.67 26
 Quantity PRICE Total Revenue Marginal Revenue 0 20 0 1 20 20 20 2 20 40 20 3 20 60 20 4 20 80 20 5 20 100 20 6 20 120 20

Marginal revenue is the change in the total revenue due to change in quantity by an unit.

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