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^dis the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much more profit does a monopolist earn compared to the joint profit each producer earns in the Nash equilibrium?

A) $2,213.38
B) $0
C) $11,106.69
D) $2,000

Correct Answer:

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