Question #67772
If Eskom (assumed sole supplier of electricity) is earning economic profits in the short run. Explain using a well labelled diagram how much output Eskom will produce and at what price this output will be sold if Eskom maximises profits.
Expert's answer
If Eskom (assumed sole supplier of electricity) is earning economic profits in the short run, then Eskom will produce such amount of output, for which MR = MC at the price from the demand curve for this amount of output.
