The XYZ Steel Company Produces Its Own Coal for Use

question 15

Multiple Choice

The XYZ Steel Company produces its own coal for use in its production facility.The demand for steel is given by P_s = 500 - 2Q_s and the total cost of producing steel is given by TC_s = 175Q_s,where Q_s is tons of steel per week.The price of coal in a perfectly competitive market outside the firm is $250 per ton,and the total cost of producing coal is given by TC_c = 40 + 5Q_c²,where Q_c is tons of coal per week.How much steel should the XYZ Company produce?

• A) 6.25 tons.
• B) 18.75 tons.
• C) 25 tons.
• D) 43.75 tons.
• E) 75 tons.

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Definitions:

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The predetermined price at which convertible securities can be exchanged for common stock.

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The predetermined price at which an option can be exercised.