2.1 (15 points) Nvidia and AMD are duopolists in the discrete graphics processing unit (GPU) market. The marginal cost of both companies is 2 (hundred dollars). The market demand function for GPU is given by Q = 10 0.5P

(a) (5 points) Derive the Cournot equilibrium price for GPU?

(b) (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. What is Nvidias maximal profit in the sequential-game equilibrium?