Kinked Demand. VoIP Telephone, Inc., provides local and long distance telephone service in the Toledo, Ohio market. The company faces the following segmented demand and marginal revenue curves for its service:
Over the range of 0 to 25(000) customers per month:

When output exceeds 25(000) customers per month:

The company's total and marginal cost functions are as follows:

where P is price (in dollars), Q is output (in thousands), and TC is total cost (in thousands of dollars).

Question

Kinked Demand. VoIP Telephone, Inc., provides local and long distance telephone service in the Toledo, Ohio market. The company faces the following segmented demand and marginal revenue curves for its service:
Over the range of 0 to 25(000) customers per month:
 
 When output exceeds 25(000) customers per month:

The company's total and marginal cost functions are as follows:
  
where P is price (in dollars), Q is output (in thousands), and TC is total cost (in thousands of dollars).

Quizplus · Accepted Answer

The Answer of Kinked Demand. VoIP Telephone, Inc., provides local and long distance telephone service in the Toledo, Ohio market. The company faces the following segmented demand and marginal revenue curves for its service:
Over the range of 0 to 25(000) customers per month:
 
 When output exceeds 25(000) customers per month:

The company's total and marginal cost functions are as follows:
  
where P is price (in dollars), Q is output (in thousands), and TC is total cost (in thousands of dollars).