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# Kalamazoo Competition-Free Concrete KCC is a local monopolist of ready-mix

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&#39;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&#39;s profit-maximizing sales quantity and price? Q= units P \$ d. How does it compare to KCC&#39;s profit-maximizing sales quantity and price with the original demand curve? As the demand curve&#39;s slope becomes flatter, the profit-maximizing price decreases and the profit-maximizing quantity decreases. As the demand curve&#39;s slope becomes flatter, the profit-maximizing price increases and the profit-maximizing quantity increases. As the demand curve&#39;s slope becomes flatter, the profit-maximizing price increases and the profit-maximizing quantity decreases. As the demand curve&#39;s slope becomes flatter, the profit-maximizing price decreases and the profit-maximizing quantity increases. As the demand curve&#39;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&#39;s marginal revenue increases As the demand curve becomes more elastic, the monopolist&#39;s Lemer Index increases. As the demand curve becomes more elastic, the monopolist&#39;s markup decreases. As the demand curve becomes more elastic, the monopolist&#39;s marginal cost decreases As the demand curve becomes more elastic, the monopolist&#39;s price-cost margin increases

Feb 07 2020 View more View Less Get Solution