The figure to the right shows the average total cost curve for a firm producing electricity and the total demand for electricity in the firm's market. If the firm is a monopoly and produces 36 billion kilowatt hours of electricity per year, then its average total cost of production will be $ 0.16 per kilowatt hour. (Enter a numeric response using a real number rounded to two decimal places.) Now suppose instead that two firms are in the market, each producing half of the market's electricity. If each firm has the same average total cost curve, then the average cost of producing electricity will now be $0.08 per kilowatt hour. (...) Price and cost (dollars per kilowatt hour) 0.52- 0.48- 0.44- 0.4- 0.36- 0.32- 0.28- 0.24- 0.24 0.16- 0.12- 0.08- 0.04- 0+ D. 8 12 16 20 24 28 32 36 40 4 Quantity of kilowatt hours (in billions)

The figure to the right shows the average total cost curve for a firm producing electricity and the total demand for electricity in the firm's market. If the firm is a monopoly and produces 36 billion kilowatt hours of electricity per year, then its average total cost of production will be $ 0.16 per kilowatt hour. (Enter a numeric response using a real number rounded to two decimal places.) Now suppose instead that two firms are in the market, each producing half of the market's electricity. If each firm has the same average total cost curve, then the average cost of producing electricity will now be $0.08 per kilowatt hour. (...) Price and cost (dollars per kilowatt hour) 0.52- 0.48- 0.44- 0.4- 0.36- 0.32- 0.28- 0.24- 0.24 0.16- 0.12- 0.08- 0.04- 0+ D. 8 12 16 20 24 28 32 36 40 4 Quantity of kilowatt hours (in billions)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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