Question regarding economies of scope


Task: According to a statistical study, the following relationship exists between an electric light and the power plant's fuel costs (C) and its eight-hour output as a percent of capacity (Q):

C = 16.68 + 0.125Q + 0.00439Q2

Q1. When Q increases from 50 to 51, what is the increase in the cost of fuel for this electric plant?

Q2. Of what use might the result in part a be to the plant's manager?

Q3. Derive the marginal (fuel) cost curve for this plant, and indicate how it might be used by the plant's manager.

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Microeconomics: Question regarding economies of scope
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