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This paper studies the effect of time delay on stability of mutualism population model with limited resources for both species. First, the stability of the model without time delay is analyzed. The model is then improved by considering a time delay in the mechanism of the growth rate of the population. We analyze the effect of time delay on the stability of the stable equilibrium point. Result showed that the time delay can induce instability of the stable equilibrium point, bifurcation and stability switches.