Question

Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix concrete.

Its annual inverse demand function is   P= 100 - 0.5Q

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: MC = 75 + 0.25Q


a. What is its profit-maximizing sales quantity and price? Round to the nearest whole number.
    
    Q =  units.

    P = $.

b. What is the value of the MC at is profit-maximizing sales quantity? Round to the nearest whole number.

    $.

c. What is the elasticity of demand for this product? .

    (Include a negative sign if necessary, and round your answer to include only 1 significant digit, e.g. -0.5)

Answer 1

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