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The market demand function for discrete graphics processing unit (GPU) is given by ...

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Finance

The market demand function for discrete graphics processing unit (GPU) is given by

Q = 20 0.25P

(a) (10 points) Suppose Nvidia is the monopoly of the GPU market. Nvidias cost function is C(q) = q2 + 5q. Find the equilibrium price for GPU when Nvidia maximizes its profit.

(b) (10 points) Suppose Nvidia and AMD are duopolies in the GPU market, and the marginal cost of producing GPU is 8 for both companies. Derive the Cournot equilibrium price for GPU.

(c) (10 points) Nvidia is the pioneer in the discrete GPU market, introducing its main line of product the GeForce in 1999, while AMD did not introduce is main product until 2000. Suppose in a sequential Cournot competition game, Nvidia decides its quantity of production first. AMD observes Nvidias output qN before setting its own production qA. Marginal costs for both companies are still 8. What is Nvidias maximal profit in the sequential-game equilibrium?

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