# What would the equilibrium price and quantity be if the market is perfectly competitive?

Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix con- crete. Its annual Show more Kalamazoo Competition-Free Concrete (KCC) is a local monopolist of ready-mix con- crete. 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. What is KCCs marginal revenue when it sells 4000 cubic yards? (b) What is KCCs marginal revenue curve? (c) What is KCCs 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 KCCs profit when it chooses profit-maximizing sales quantity and price? (f) WhatisKCCsmarkup(orprice-costmarginorLernerindex)atprofit-maximizing quantity? (g) What is the consumer surplus when KCC chooses profit-maximizing price and quantity? (h) Graph KCCs 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. Show less

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