Problem: Suppose a company LCD has been operating under a monopoly with large profits for many years. Another company BC (with no quality or cost advantage) plans to enter the market.
1. Assuming that the countries can talk to each other and know each other's moves; What would the pricing outcome be? What would happen to LCD's profits and what would determine BC's profits?
2. Now assuming these two companies couldn't talk to each other; what would be the effect of the game on the Price and profits of the two companies?
3. What does the format of this analysis pertain to?