A US Company and a Japanese Company Sells an Identical Product

Multiple Choice

A U.S. company and a Japanese company sells an identical product in the U.S. market. The inverse demand equation for this product is P_US = 5 !0.2(Q_USUS + Q_{US J}) . Suppose that the best-response functions of the U.S. and Japanese companies are Q_USUS = 10 !0.5Q_{US J} and Q_{US J} = 7.5 !0.5Q_USUS, respectively. Consumer surplus in the U.S. market is:

A) Around $27.2 million.
B) Around $13.6 million.
C) Around $6.8 million.
D) Around $3.4 million.
E) Around $1.7 million.