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Suppose the Clean Springs Water Company has a monopoly on bottled water sales

Marketing

Suppose the Clean Springs Water Company has a monopoly on bottled water sales. If the price of tap water increases, what is the change in Clean Water s profit-maximizing levels of output, price, and profit? Explain in words and with a graph. Hint: Tap water is a substitute for bottled water. If the price of tap water goes up, what should happen to the demand for bottled water?

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