(Answered) OUESTION 2(20)2.1 Assume that ESKOM is the sole provider of electricity in South Africa. To meet…

OUESTION 2(20)2.1
Assume that ESKOM is the sole provider of electricity in South Africa. To meet the monthly demand for electricity in the country, which is represented by the estimated inverse demand function P=1200-4Q. the utility company has set up two electric generating facilities: QK kilowatts are produced at Kusile facility (K) and QM kilowatts are produced at Matimba facility (M). The total output therefore is Q=QK QM The costs of producing electricity at each facility are estimated as CK(QK)=8000 6QK2 and CM(QM)= 6000 3QM2. Determine the profit-maximising amounts of electricity to produce at the two facilities, the optimal price and the utility company’s profits.
2.2
The table below provides information for three firms that enjoy market power such that the marginal revenue (MR) for each of the firms can be represented by the expression: MR=P[1 εlonpεlonp], where P= price of the product, and εlonp= own price elasticity of demand for the firm’s product. MC is the marginal cost.
[[Season,Firm],[Groceries store,Clothing shop,Photocopying shop],[MC,εlonp,MC,εlonp,MC,εlonp]]