Firm 1 and Firm 2 are in a duopoly, earning each annual profits of £10 million per year. Firm 1 could earn £20 million p

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Firm 1 and Firm 2 are in a duopoly, earning each annual profits
of £10 million per year. Firm 1 could earn £20 million per year as
a monopolist. Firm 1 drops its price to £40 when its marginal cost
is £50 and holds it there for a year to be able to drive Firm 2 out
of the market.
(a) What pricing strategy is the manager of Firm 1 considering?
Explain this strategy and how it helps to reduce competition in a
market.
(b) The year that it drops its price, Firm 1 will lose £10
million. At what level of interest rate i will the strategy of Firm
1 be profitable?