A U.S. company and a Japanese company sells an identical product in the Japanese market. The inverse demand equation for this product is PJ = 10 !0.5(QJUS + QJ J) . Suppose that the best-response functions of the U.S. and Japanese companies are QJUS = 6 !0.5QJ J and QJ J = 9 !0.5QJUS, respectively. Consumer surplus in the Japanese market is:
A) $25 million.
B) $30 million.
C) $42.5 million.
D) $45 million.
E) $60 million.
Correct Answer:
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