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 + 2Q.
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. (Answers should be rounded two decimal places)
The regulated price would be $___, and the firm would produce ___ units of electricity.
The total consumer surplus would be $___, and the firm would earn a $___ profit.