Many observers of today’s high-stakes, high-technology world argue that the world’s largest manufacturer of microprocessors, Intel, is a monopoly. They point out that to compete effectively with Intel, a potential adversary would have to invest billions of dollars. Intel provides the critical microprocessor chip that goes into most of the world’s personal computers. Each new generation of microprocessor quickly becomes the industry standard for IBM-compatible personal computers. Apple Computer has also used Intel chips since 2006. A few companies have tried to clone Intel’s chips, but they have not been successful for both technical and legal reasons.

Intel spends billions of dollars developing each new generation of microprocessor. Would it spend more or less if it had a smaller share of the microprocessor market?