What the business world needed, according to Denis A. Krusos, was a way to connect the computer on your desk with the office photocopy machine -- an odd marriage indeed.

The benefits were obvious. By sending a document directly from your computer to a display on the underside of the copier lid, the number of copies you could produce would be limited only by the speed of the copier in your office. So Krusos developed a flat computer screen that can replace the lid on a photocopy machine or serve as a display for a personal computer.

The new display, made by Krusos's company, CopyTele Inc., in Huntington Station, N.Y., has to overcome the limitations of existing flat panels, which have either very low resolution or a very high price. The CopyTele screen produces images by activating tiny dye particles suspended in a liquid. Because it has up to eight times the density of dots as other computer screens, it creates a much sharper picture.The image doesn't need to be continuously refreshed, so it stays on even after you pull the plug. The screen uses only one watt of power to maintain a picture, which makes it ideal for use in portable computers.

CopyTele expects to manufacture an 8 1/2" by 11" panel this year. If no glitches develop, it plans to sell the panel as part of a $4,000 add-on to a photocopier. Xerox Corp. has signed a letter of intent to buy 5,000 panels for use with its copying machines.

Morgan Keegan & Co., a brokerage firm affiliated with The Yankee Group, estimates that the market for flat panel displays will top $1.8 billion by 1987. Christopher Reynolds, a research analyst, says that several companies are working on displays that perform like CopyTele's, although they differ technologically. "These companies could move right into CopyTele's market, if it shows enough promise," he says. One Japanese company, in fact, has a product in the wings that is "frighteningly close" to CopyTele's, according to Reynolds. But then, quick copying is the name of the game.