Roach Motors has a monopoly on used cars in Enigma, Ohio.
By installing secret microphones in the showroom, the friendly salespersons at Roach are able to learn each customer’s willingness to pay and can therefore practice first
degree price discrimination, extracting from each customer his entire consumer’s surplus.
The inverse demand function for cars in Enigma is p = 2,000-10q.
Roach Motors purchases its stock of used cars at an auction in Cleveland for $600 each.
Roach motors will
Sell 70 cars for a total profit of $49,000
Sell 140 cars for a total profit of $98,000
Sell 140 cars at a price of $600/car.
Sell 168 cars for a total profit of $156,800
Discontinue operations (shut down)because its revenue does not cover variable
dont know why the q is not 70, plz explain, thanks