Economics Homework Help

Alpha Inc. and Beta Corp. compete in the market for smallgoods (processed meats). The smallgoods produced by the

two firms are homogeneous, and the firms compete in Cournot (quantity) competition. Inverse demand in the market for smallgoods is given by the function,

P = 100 − Q A 24 − Q B 24

,

where Q A

 is the quantity of smallgoods produced by Alpha, and Q B

 is the quantity of smallgoods produced by Beta. Alpha Inc.’s marginal cost is M C A = $ 20

, and Beta Corp.’s marginal cost is M C B = $ 10

.

What is Alpha Inc.’s profit function?

Hint: Keep a record of your answer for use in later questions.

Group of answer choices

ΠA=100QA−QA224−QAQB24

ΠA=90QA−QA224−QAQB24

ΠA=80QA−QA224−QAQB24