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 Qdis 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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