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Response to MillennialDem (Reply #33)

Sat Dec 19, 2015, 12:27 PM

36. Except for one thing

That $2 is also being applied to all your competitors as well, and since you know that, you will increase the price of your product just as they will, because if you could have produced the product at a cheaper price and undercut your competitors, you already would have. The new market equilibrium is now $2 higher across the board, - without accounting for the fewer sales across the board because of the higher price.

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