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    Calculating optimal output and price levels

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    Suppose the Kalamazoo Competition-free Concrete's demand function is D(P) = 5,000 -50P, its marginal cost is $40 per cubic yard, and its faces an avoidable fixed cost of $40,000 per year. What is its profit-maximizing sales quantity and price?

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    https://brainmass.com/economics/pricing-output-decisions/calculating-optimal-output-price-levels-460296

    Solution Preview

    D(P)=Q=5000-50P

    50P=5000-Q
    P=100-0.02Q

    Total ...

    Solution Summary

    The solution determines the optimal price and quantity in the given case.

    $2.19