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. Suppose Kate enters the market first and chooses her output before Alice. What is Kate's profit maximizing output?

A) 2,000
B) 1,333.34
C) 1,000
D) 4,000

Correct Answer:

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