How would the Intel-AMD equilibrium in Solved Problem 13.2 change if AMD faced the same demand function as Intel, Equation 13.10?

Equation 13.10:-

Data From Solved Problem 13.2:-

Intel and Advanced Micro Devices (AMD) are the only two firms that produce central processing units (CPUs)-the brains-for personal computers. Both because the products differ physically and because Intel's "Intel Inside" advertising campaign has convinced some consumers of its superiority, consumers view their CPUs as imperfect substitutes. Consequently, the two firms' estimated inverse demand functions differ:

where price is dollars per CPU, quantity is in millions of CPUs, the subscript \(I\) indicates Intel, and the subscript \(A\) represents AMD. Each firm faces a constant marginal cost of \(m=\$ 40\) per unit. (For simplicity, we assume that firms have no fixed costs.) Solve for the Nash-Cournot equilibrium quantities and prices.

Transcribed Image Text:

P =490 10g - 69 (13.10)