All personal computers need memory chips, called DRAM for dynamic random access memory, which were often sold in 128- Mb units. The $ 20 billion per year DRAM market is dominated by Micron, Infineon, Samsung, Hynix, and a few smaller companies who sell their DRAM to computer makers such as Dell, Compaq, Gateway, and Apple. In the late 1990s, the DRAM makers invested in bigger factories leading to a market glut, large inventories, and intense price competition. By February 2001, unsold inventories and a recession took DRAM prices into a steep fall ( see chart), dropping to about $ 1 a unit by the end of 2001, a price well below manufacturing costs. In early 2002, while inventories were still high and the recession was in full swing, prices strangely rose and peaked at about $ 4.50 a unit in April ( see chart). That month, Michael Dell of Dell Computers accused the companies of cartel- like behavior, and the Department of Justice ( DOJ) began to investigate the possibility of price- fixing. Prices now reversed, falling to $ 2 by the end of 2002, about 20 40 percent below manufacturing costs. The DOJ later released a November 26, 2001 e- mail written by Kathy Radford, a Micron manager, in which she described plans by Micron, Infineon, and Samsung to move their prices upward in unison: the consensus from all [ DRAM] suppliers is that if Micron makes the move, all of them will do the same and make it stick. On September 2004, Infineon pled guilty to participating in meetings, conversations, and communications with other DRAM makers during 2001 and agreeing during those meetings, conversations, and communications to fix the prices for DRAM. Infineon paid the U. S. government $ 160 million in fines. The DOJ announced it was investigating the other DRAM makers.

1. Estimate the equilibrium price from the chart. Who ultimately paid for any monopoly profits above the equilibrium price?