# Calculating optimal output and price levels

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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#### 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