Suppose Ace Concrete Company faces the inverse demand curve P = 2,000 - 10Q, where quantity is thousand yards of concrete sold and price is in dollars. The total cost for this firm is 200 Q + 8 Q² . Assume the firm is the only producer of concrete in the region.

a.Set up the profit maximization problem and determine the profit-maximizing output and price?

b.Graph your solution to part a.

c.List conditions that would need to be met for Ace to use 1^st degree price discrimination.

d.Suppose Ace is able to practice 1^st degree price discrimination. Illustrate the 1^st degree price discrimination solution.

e.Discuss and illustrate in a graph the welfare implications (gains in losses to producers and consumers and any dead-weight loss between b and d).

f. Is 1^st degree price discrimination economically efficient? Explain why or why not.