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 andQ^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 the difference in Kate's profit when she enters the market first compared to when Kate and Alice choose their outputs simultaneously?

A) $11,106.69
B) $5,000
C) $1106.69
D) -$3893.31

Correct Answer:

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