You are the manager of a small U.S. firm that sells nails in a competitive U,S. market (the nails you sell are a standardized commodity; store view your nails as identical to those available from hundreds of other firms). You are concerned about two events you recently learned about though trade publications:

(1) the overall market supply of nails will decrease by 2 percent, due to exit by foreign competitors;

(2) due to growing U.S. economy, the overall market demand for nails will increase by 2 percent. Based on this information should you plan to increase or decrease your production on nails? Explain.