Assume Intel and AMD are the sole producers of microprocessors. Each has a total cost function of

TC = $2.2 Billion + 0.2Qi + 0.5Q i 2 where Q i are microprocessors..

The Demand curve for the firm's product is

P = 4.2 -1.5 Q

a. Suppose the two firms act as perfect competitors and try to out compete each other and do not collude, what would be the optimal industry price and output?

b. What is the firms collude and do not compete, what would be the optimal price and output?

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Determining optimal price and output : Suppose the two firms act as perfect competitors and try to out compete each other and do not collude, what would be the optimal industry price and output? |

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