Question

Suppose you are an analyst for the Coca-Cola Company. An individual's inverse demand for Coca-Cola is estimated to be P = 98 − 4Q (in cents). If Coca-Cola is produced according to the cost function C(Q) = 1,000 + 2Q (in cents), compute the surplus consumers receive when Coca-Cola charges the optimal block price.

Multiple Choice

$0

$11.52

$1,152

$576

Answer 1