Final answer:
The equilibrium price in a market with two competing firms with the given demand function and equal marginal costs cannot be determined without further information on their strategic interactions. This scenario resembles a Bertrand competition, where firms compete on price, but requires game theory analysis to find the Nash equilibrium price.
Step-by-step explanation:
The question pertains to finding the equilibrium price in a market scenario where two firms are competing by simultaneously choosing what price to charge. They operate under the assumption that the lower-priced firm captures the entire demand or, in the case of a price tie, Firm 1 captures the whole demand. Given that both firms have the same marginal cost of 5, they must set a price above this cost to make a profit but below the demand curve's maximum willingness to pay to capture the market. Essentially, each firm wants to set a price just slightly below the competitor's, assuming rational behavior.
Unfortunately, without more information on the strategic interactions between the firms, potential collusive behavior, or how demand is split at different prices, we cannot determine a specific equilibrium price solely based on the information given. In a perfectly competitive market, firms would price at marginal cost, but this scenario suggests an oligopolistic market where strategic interactions are crucial.
The equilibrium price would typically be determined through game theory analysis, specifically using concepts like Nash equilibrium in a Bertrand competition model - where firms choose price instead of quantity - to find the exact pricing strategy where neither firm has an incentive to deviate unilaterally from this equilibrium price. However, a specific numeric answer cannot be provided without additional game-theoretic analysis.