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whitelouse41Lv1
28 Sep 2019
Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete. Its annual demand function is
Qd = 24,000 - 200P,
where P is the price, in dollars, of a cubic yard of concrete and Q is the number of cubic yards sold per year. Its marginal cost is $20 per cubic yard, and it faces an avoidable fixed cost of $150,000 per year.
a. What is its profit-maximizing sales quantity and price if the monopolist were to produce?
b. What is the deadweight loss from monopoly pricing?
Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete. Its annual demand function is
Qd = 24,000 - 200P,
where P is the price, in dollars, of a cubic yard of concrete and Q is the number of cubic yards sold per year. Its marginal cost is $20 per cubic yard, and it faces an avoidable fixed cost of $150,000 per year.
a. What is its profit-maximizing sales quantity and price if the monopolist were to produce?
b. What is the deadweight loss from monopoly pricing?
Yusra AneesLv10
28 Sep 2019
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