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Kalamazoo Competition-Free Concrete KCC is a local monopolist of ready-mix concrete Its annual demand function is Q12000 400P where P is the price

 Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete. Its annual demand function is Q12,000 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. Assume for simplicity that it has no fixed costs. a. What is its profit-maximizing sales quantity and price? Q= units. P $ b. Now suppose there is a demand curve with a slope of 0.00125 that goes through the price and quantity chosen by KCC? P 27.50-0.00130 P 30.00-0.0013Q. P 27.50 0.005Q P 27.50 0.00250 P 30.00-0.0025Q. c. With this demand curve, what is KCC's profit-maximizing sales quantity and price? Q= units P $ d. How does it compare to KCC's profit-maximizing sales quantity and price with the original demand curve? As the demand curve's slope becomes flatter, the profit-maximizing price decreases and the profit-maximizing quantity decreases. As the demand curve's slope becomes flatter, the profit-maximizing price increases and the profit-maximizing quantity increases. As the demand curve's slope becomes flatter, the profit-maximizing price increases and the profit-maximizing quantity decreases. As the demand curve's slope becomes flatter, the profit-maximizing price decreases and the profit-maximizing quantity increases. As the demand curve's slope becomes flatter, the profit-maximizing price does not change and the profit-maximizing quantity does not change. e. How does this comparison relate to the discussion in Read More Online 17.1? As the demand curve becomes more elastic, the monopolist's marginal revenue increases As the demand curve becomes more elastic, the monopolist's Lemer Index increases. As the demand curve becomes more elastic, the monopolist's markup decreases. As the demand curve becomes more elastic, the monopolist's marginal cost decreases As the demand curve becomes more elastic, the monopolist's price-cost margin increases

Feb 07 2020 View more View Less

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