In a _____, firms produce a higher output, which lowers price, resulting in industry profit being less than would be shared if they behaved like a monopoly.

Question

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In a duopolists' dilemma, firms in a duopoly (a market dominated by two firms) independently decide to increase production to gain a larger market share. This increased output leads to a decrease in the market price, which can reduce overall industry profits compared to what could be achieved if the firms cooperated and acted like a monopoly, limiting output to keep prices and profits high.

In a _____, Firms Produce a Higher Output, Which Lowers