Question

Electricity production requires the construction of very big and expensive power plants. Let's say a nuclear power plant costs $100 million. Once it's built, the only input required is very small amount of labor- one person sits in a room and watches a screen to make sure nothing terrible happens. This person is paid $10/hour ($80 per day). The power plant can produce 100,000,000 watts of electricity a day. (A "watt" is how we measure electricity 100,000,000 is 100 "megawatts".) 5. How much does the first unit of electricity (the very first watt of power produced) cost to make? 6. How much does the 100th megawatt cost? 7. What is the fixed cost of producing 10 watts of electricity? 8. What is the variable cost of producing 100 megawatts? 9. What is the total cost of producing 200 megawatts? 10. What is the change in cost of increasing output from 800 megawatts to 900 megawatts? (This is the marginal cost.) 11. What is the average total cost of producing 500 megawatts? 12. What is the average total cost of producing 600 megawatts? 13. What is the average total cost of producing 700 megawatts? 14. Do you see a trend in the average total cost as we increase output? If yes, please describe it. (E.g. is the average total cost curve "U" shaped?)

Answer 1

somne Cn megawadt Lost s 1st wnit and っ 8. The vari aldl cos i480 TC 200 M3 260 odusina 5o0maw TC ち00 TC600. 166,667.4 3 = 142 , 85 ,99 faui