A state owned company is providing electricity at the price of $0, 105 and faces the demand for electricity P = 1.255 - 0.001Q. The company has a cost function C(Q) = 100.625 + 0.1050Q. Commonwealth of Pennsylvania sells the firm, and now the firm's only goal is profit maximization.
What is the number of kilowatt hours of electricity produced and what is the price that company will charge?
How much more profit will this firm make as a result of privatization.