Tina's Bakery and Cliff's Cupcakes & More participate in a duopoly and are maximizing profits by cooperating. If Tina decides to increase her production of baked goods, market price would:

Question

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In a duopoly where firms are cooperating to maximize profits, if one firm increases production, it adds more supply to the market. According to the law of supply and demand, an increase in supply, with demand remaining constant, leads to a decrease in price.

Tina's Bakery and Cliff's Cupcakes & More Participate in a Duopoly