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Study of Duopoly Between Intel and Amd

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Study of Duopoly Between Intel and Amd
Microeconomics
Group Project

“AMD Inside”

Study of Duopoly in microprocessor market
( Submitted On 15-Mar-2012 )

Submitted By:
Mayank Agrawal (PGPM811_55)
Snigdha Tripathy (PGPM811_93)

Contents 1. Background 3 2. Purpose 3 3. Scope 3 4. What is duopoly? 3 5. The microprocessor market 4 5.1 Which is better: Intel or AMD? 4 6. How it all began – A brief history 5 7. Cournot’s Model as applied to Intel and AMD. 5 8. Revenues 10 9. Price War: Intel Vs AMD 10 9.1 'Predatory Dumping' 10 10. Market Share 11 11. Questions 12 12. Answers: 12 13. A New Entrant to change the duopoly 15 13.1 Via Technologies – Cornered 15 14. Latest Updates 15 15. Conclusion 16

1. Background 2. Purpose
The purpose of this report is to study the application of the microeconomic theory of Duopoly in a real life case. 3. Scope
This report will analyze the form and type of competition between firms in personal computer microprocessor market and the competition between two companies, Intel and AMD using the Cournot’s model of Duopoly. 4. What is duopoly?
A duopoly is a market condition in which two companies producing a similar type of product have control over the market. This is similar to monopolies in which only one company controls the market and oligopolies in which multiple companies are allowed to trade in the market.
The duopoly theory looks at the interplay of two companies in a market: each firm's prices and production are set by the decisions of the other.
Webster defines duopoly as, an oligopoly limited to two sellers.
The concept of a duopoly was proposed by French economist Antoine Augustin Cournot (1801-1877) and we use the Cournot’s model to study the same.
Features of a duopoly as per Cournot’s model. 1. Two firms competing with each other. Price leadership by the larger of the two firms may exist – the smaller firm follows the price lead of the larger
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