Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd 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. Which of the following gives Kate's best response function?
A. QK = 200 - 0.01QK
B. QK = 100 - 0.005QA
C. QK = 2,000 - 0.5QK
D. QK = 2,000 - 0.5QA
D. QK = 2,000 - 0.5QA
Economics
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