Skis and snowboards are close substitute goods. A ________ in the price of snowboards would tend to ________ the demand for ________

Carson Bell and Renee Dohr own the only two firms in the United States that sell a unique herbal vitamin supplement that has no close substitutes. They plan a secret meeting at the National Zoo in Washington, DC, to form a cartel in order to increase

their profit. a . How do they determine the price of their good? b. Do Carson and Renee have an incentive to cheat on their agreement with each other? Explain. c. How could Carson or Renee cheat?

Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:

A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.