Question

There are 10 households in Lake Wobegon, Minnesota, each with a demand for electricity of Q-60-P. Lake Wobegon Electric's (LWE) cost of producing electricity is TC 600 +Q. a. If the regulators of LWE want to make sure that there is no deadweight loss in this market, what price will they force LWE to charge? What will output be in that case? Calculate consumer surplus and LWE's profit with that price. fRound afl responses to two decimal places.) The regulated prioe would be $1. and the firm would produce 590 units of electricity. Total consumer surplus would be $17405, and the firm would earn a $-600 profit. b. If regulators want to ensure that LWE doesn't lose money, what is the lowest price they can impose? Calculate output, consumer surplus, and profit. Is there any deadweight loss? Round alfl responses to twodecmal places.) The regulated price would be $ and the firm would producuns of electricity. Total consumer surplus would be s and the firm would eam a sproft Finally, there will be a deadweight loss of S

Answer 1

-+ne firm the ovest frice If veguiaror m Hamts to ensre dxes mek ose mome Wowd 'oe . P ATC e. 6000-10 = -ao Q. 2. 9.65 16 98 , 26 C S 2 14'0 382 a. 459'4 5ao