Question
In: Economics
Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete.
Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete. Its annual demand function is Qd = 10000 ? 100P, where P is the price, in dollars, of a cubic yard of concrete and Q is the number of cubic yards of concrete per year. (a) What is KCC’s marginal revenue when it sells 4000 cubic yards? (b) What is KCC’s marginal revenue curve? (c) What is KCC’s price when it sells 4000 cubic yards? (d) Suppose its marginal costs are $40 per cubic yard, and it has avoidable fixed costs of $40000 per year. What are its profit-maximizing sales quantity and price? (e) What is KCC’s profit when it chooses profit-maximizing sales quantity and price? (f) What is KCC’s markup (or price-cost margin or Lerner index) at profit-maximizing quantity? (g) What is the consumer surplus when KCC chooses profit-maximizing price and quantity? (h) Graph KCC’s demand curve, marginal revenue curve, and marginal cost curve in one figure. Label the equilibrium price and quantity in the same figure. Label the consumer surplus, producer surplus plus avoidable fixed cost, and deadweight loss in the same figure. (i) What would the equilibrium price and quantity be if the market is perfectly competitive? What would be the aggregate surplus? (j) What is the deadweight loss from monopoly pricing? Label the deadweight loss in the same figure
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete. Its annual demand function is...
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Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete. Its annual demand function is...
Kalamazoo Competition-Free Concrete (KCC) is a local monopolist
of ready-mix concrete. Its annual demand function is
Qd=40,000−400P,Q d=40,000−400P,
where P is the price, in dollars, of a cubic yard of
concrete and Q is the number of cubic yards sold per year.
Suppose that Kalamazoo's marginal cost is $20 per cubic yard and
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(Requires Read More Online 17.1.) Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete....
(Requires Read More Online 17.1.) Kalamazoo
Competition-Free Concrete (KCC) is a local monopolist of ready-mix
concrete. Its annual demand function is
Qd =
10,000 - 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.
Suppose that Kalamazoo's marginal cost is $20 per cubic yard.
Assume for simplicity that it has no fixed costs.
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As in Worked-Out Problem 17.2 (page 599), Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of...
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Competition-Free Concrete (KCC) is a local monopolist of ready-mix
concrete. Its annual demand function is Qd=16,000−200P, where P is
the price, in dollars, of a cubic yard of concrete and Q is the
number of cubic yards sold per year. Suppose that Kalamazoo's
marginal cost is $20.00 per cubic yard and its avoidable fixed cost
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are 14 min and 5 min, respectively. The mean and standard deviation
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