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Effects of sudden increase or decrease in # of competitors

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Based on the computer industry what are the positive and negative effects of either a sudden increase or decrease in the number of competitors on prices in the long run.

What would you recommend as a course of action, if any, and how would price moves from today to the future?

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Solution Preview

Lets assume that there is a sudden increase in the number of competitors in the computer industry.

Positive effects:
-An increase in the number of competitors would mean that more computers would be supplied in the market. As the supply of computers increase, price of computers would go down.
-Another positive effect ...

Solution Summary

The solution discusses how would price moves from today to the future and what to recommend for this course of action.

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