The Commonwealth of Pennsylvania is the monopoly retailer of wine in the state. Suppose that Quaker Cabernet has no close substitutes and that the statewide inverse demand function for this wine is p=5-0.001Q. The state purchases the wine on the wholesale market for $2 per bottle, and the state-operated liquor stores incur no other expenses to sell this wine. a. What are the state's profit-maximizing price and quantity? The equilibrium price would be $☐. (round your answer to two decimal places) The equilibrium quantity would be ☐ units. (round your answer to two decimal places)

The Commonwealth of Pennsylvania is the monopoly retailer of wine in the state. Suppose that Quaker Cabernet has no close substitutes and that the statewide inverse demand function for this wine is p=5-0.001Q. The state purchases the wine on the wholesale market for $2 per bottle, and the state-operated liquor stores incur no other expenses to sell this wine. a. What are the state's profit-maximizing price and quantity? The equilibrium price would be $☐. (round your answer to two decimal places) The equilibrium quantity would be ☐ units. (round your answer to two decimal places)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.3P

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