-In the figure above,complete the graph of the electric utility company by adding the marginal revenue and marginal cost curves.Assume the marginal cost is constant at 4¢ per kilowatt-hour.Now discuss the marginal cost pricing rule and the average cost pricing rule regulators might use to regulate the firm.Be sure to state the price and quantity that are selected for each option.Also,what price and quantity does the firm select if it is not regulated?
Definitions:
Direct Materials
Raw materials that are directly consumed in the manufacturing process of a product and are easily identifiable in the final product.
Unit Cost
The cost incurred to produce, store, and sell one unit of a product, calculated by dividing total costs by the number of units.
Cost Driver
A factor that causes the cost of an activity or process to change.
Time Frame
The period during which an event occurs or is planned to occur, often with a specified start and end date.
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