Enrodes is a monopoly provider of residential electricity in a region of norther
ID: 2736293 • Letter: E
Question
Enrodes is a monopoly provider of residential electricity in a region of northern Michigan. Total demand by its 5 million households is Qd= 2,000 - 2P, and Enrodes can produce electricity at a constant marginal cost of $8 per megawatt hour. Consumers in this region of Michigan have recently complained that Enrodes is charging too much for its services. In fact, a few consumers are so upset that they’re trying to form a coalition to lobby the local government to regulate the price Enrodes charges.
If all the consumers of this region joined the coalition against Enrodes, how much would each consumer be willing to spend to lobby the local government to regulate Enrodes’s price?
Instructions: Round your answer to the nearest penny (two decimal places).
$__________ ?
True or false: The consumers are likely to be successful in their efforts?
Explanation / Answer
QD = 2,000 - 2P means Equilibrium Quantity = 1,000 and Price = $500.
Each consumer be willing to spend to lobby the local government to regulate Enrodes’s price = $500
Yes the consumers are likely to be successful in their efforts.
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