An Electric Utility Is Going to Use a Block-Pricing Schedule

question 82

Essay

An electric utility is going to use a block-pricing schedule.They plan to charge P₁ for the first Q₁ units and P₂ for the subsequent units.The units sold at P₂ are the total units sold,Q₂,minus the total units sold at P₁.The inverse demand curve is P = $100 - Q,and the marginal and average cost is $40.Use calculus to solve for P₁,P₂,Q₁,Q₂.

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