Harvest Corp currently competes in a duopoly. The market price is $40, and Harvest’s annual profit is $40 million. If Harvest were the only firm in the market, Harvest could charge a monopoly price of $100 per unit and earn $140 inillion annually for the indefinite future. By charging $20 per unit for one year, Harvest could drive her rival out of the market and maintain a mnonopoly position forever, but this strategy will result in a $80 million loss since the inarginal cost is $32 per unit. (a) Name the pricing strategy that the Harvest’s manager is considering. Describe the main feature of this pricing strategy. What is the condition for this strategy to be successful? (b) Suppose that the interest rate is 8 percent, should this pricing strategy to be adopted?