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Suppose that the only competing suppliers of Internet services are NewServices and RealWest. At present, they each have 50% of the market share in
Suppose that the only competing suppliers of Internet services are NewServices and RealWest. At present, they each have 50% of the market share in their community. However, NewServices is upgrading their connection speeds but at a higher cost. Be- cause of this, each month 30% of RealWest's customers will switch to NewServices, while 10% of NewServices customers will switch to RealWest. (a) What will be the market share of each company after the first two months? (b) How about in the long run?
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