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 difference in the deadweight loss compared to a monopoly in this market?

A) $666.66
B) $2,000
C) $5,553.31
D) $10,000

Correct Answer:

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