Suppose an incumbent rm faces the possibility of entry by a challenger. The challenger moves rst and decides whether to enter and pay entry cost, f > 0, or to stay out. If the challenger enters, the incumbent may acquiesce and the two rms split the monopoly prot. If the incumbent ghts, they play a static Bertrand game and earn equilibrium prots from that game. Formulate the situation as an extensive form game and nd the Subgame Perfect Nash Equilibria. Remember that an equilibrium is a set of strategies, one for each player, that explicitly states what the players will do at all possible nodes of the game. Assume demand: P(Q) = a Q and costs: C(q) = cq for the incumbent and C (q) = cq + f for the challenger, with oz > c