Kate and Alice Are Small-Town Ready-Mix Concrete Duopolists

Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is where P is the price of a cubic yard of concrete and Q^d is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the market price in the Nash equilibrium?

A) $80
B) $86.67
C) $100
D) $93.34

Correct Answer:

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