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The XYZ Steel Company Produces Its Own Coal for Use

Question 1

Multiple Choice

The XYZ Steel Company produces its own coal for use in its production facility.The demand for steel is given by Ps = 500 - 2Qs and the total cost of producing steel is given by TCs = 175Qs,where Qs is tons of steel per week.The price of coal in a perfectly competitive market outside the firm is $250 per ton,and the total cost of producing coal is given by TCc = 40 + 5Qc2,where Qc is tons of coal per week.How much should XYZ steel charge itself for coal?


A) $250 per ton.
B) $350 per ton.
C) $500 per ton.
D) $750 per ton.
E) $1,000 per ton.

Correct Answer:

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