Question

The second largest public utility in the nation is the sole provider of electricity in 32 counties of southern Florida. To meet the monthly demand for electricity in these counties, which is given by the inverse demand function P = 1,200 – 4Q, the utility company has set up two electric generating facilities: Q₁ kilowatts are produced at facility 1, and Q₂ kilowatts are produced at facility 2 (so Q = Q₁ + Q₂). The costs of producing electricity at each facility are given by C₁(Q₁) = 8,000 + 6Q₁² and C₂(Q₂) = 6,000 + 3Q₂², respectively. Determine the profit-maximizing amounts of electricity to produce at the two facilities, the optimal price, and the utility company’s profits.

Instruction: Enter your responses rounded to two decimal places.

Electricity at facility 1:  units

Electricity at facility 2:  units

Price: $

Instruction: Use the rounded values calculated above. Enter your response rounded to the nearest two decimal places.

Profits: $

Answer 1