Homework Answers
Avg Variable cost = Avg. labor cost + Avg fuel cost
= 0.04 per Kwh + 0.07 per kWh
= 0.11 per kWh
Avg sale price of electricity per kWh = 0.13, which is greater than the avg variable cost
As Utility can recover its Avg variable cost from selling electricity, therefore it should not shut down the plant in the short run
Add Answer to:
.17 instead of $17
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