Which of the following best describes marginal cost?
a. The sum of fixed cost and variable cost
b. Total cost divided by the quantity of output produced
c. Variable cost divided by the quantity of output produced
d. Change in total cost resulting from a one-unit change in output
d
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West Coast Gas, Inc, is a natural gas supplier. The firm faces the demand schedule shown in the table above and cannot price discriminate
The company's fixed cost is $1,000 per month and its marginal cost is constant at $10 per thousand of cubic feet. The government imposes a marginal cost pricing rule on the company. a) What is the price of natural gas supplied by West Coast Gas? How many cubic feet does the company sell? What is the firm's economic profit per month? b) How does the regulation affect total surplus? c) Is the regulation in the social interest? Explain.
SUMMARY OUTPUTRegression StatisticsMultiple R0.971R-SquareAAdjusted R-SquareBStandard Error30.462Observations51ANOVA dfSSMSFSignificance FRegressionC747851.57373925.79402.989.89E-31Residual48D927.91 Total50792391.11 CoefficientsStandard Errort StatP-ValueLower 95%Upper 95%InterceptE62.1326.791.60E-301539.661789.51Price of Roses-6.68F-1.411.64E-01-16.162.81Disposable Income (M)9.730.34G1.23E-319.0410.42From the regression output, the predicted regression line is:
A. QRd = 2.32 ? 6.68PR + 9.73M. B. QRd = 1664.46 ? 6.68PR + 9.73M. C. PR = 1664.46 ? 6.68QR + 9.73M. D. There is not sufficient information to answer the question.