Tina's Bakery and Cliff's Cupcakes & More participate in a duopoly and are maximizing profits. If Tina decides to increase her production of baked goods, the total combined profit of the two firms would:

Question

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In a duopoly, if one firm increases production while the other firm's production remains constant, it typically leads to increased competition and a reduction in prices, which can decrease the total combined profit of the two firms.

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