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The market for athletic shoes is intensely compeotitive. In 2016, the Sports Authority, one of the firms in the market, declared bankruptcy and olosed ts 500 stores. An Associated Pross article discussed the effect of the closings of the Sports Authority stores on Foot Locker's store in the New York City borough of Manhatan, and quoted Foot Locker's CEO as stating "We realized a long time ago that we couldn't be everything to everybody in one storej We have defintive brands and experiences. Source: Associated Press, "Foot Locker to Play Up the Stere Experience," erainsnewyork.com, August 29, 2016. To maximize profit, a monopolistically compettive firm produces output up to the point where OA. marginal revenue equals demand. OB. demand equals average cost OC. marginal revenue equals marginal cost. O D. demand equals marginal cost.

The market for athletic shoes is intensely compeotitive. In 2016, the Sports Authority, one of the firms in the market, declared bankruptcy and olosed ts 500 stores. An Associated Pross article discussed the effect of the closings of the Sports Authority stores on Foot Locker's store in the New York City borough of Manhatan, and quoted Foot Locker's CEO as stating "We realized a long time ago that we couldn't be everything to everybody in one storej We have defintive brands and experiences. Source: Associated Press, "Foot Locker to Play Up the Stere Experience," erainsnewyork.com, August 29, 2016. To maximize profit, a monopolistically compettive firm produces output up to the point where OA. marginal revenue equals demand. OB. demand equals average cost OC. marginal revenue equals marginal cost. O D. demand equals marginal cost.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The market for athletic shoes is intensely competitive. In 2016, the Sports Authority, one of the firms in the market, decdared bankruptcy and closed ts 500 stores. An Associated Press article discussed the effect of the closings of the Sports Authority stores on Foot Locker's store in the New York City borough of Manhatan, and quoted Foot Locker's CEO as stating "We realized a long time ago that we couldn't be everything to everybody [in one storej. We have defintive brands and experiences." Source: Associated Press, "Foot Locker to Play Up the Store Experience," erainsnewyork.com, August 20, 2010. To maximize profit, a monopolistically compettive firm produces output up to the point where A. marginal revenue equals demand. OB. demand equals average cost. Oc. marginal revenue equals marginal cost D. demand equals marginal cost. A columniet in the Wall Street Journal offers the following opinion of Starbucks: "Starbucks is in some ways the victim of ts success, having attracted increasingly aggressive competitors into what is now a fairly crowded market." Source: James Freeman, "Tragedy of the Starbucks Commons," Wa Street Jumal, January 19, 2019. Do all firms that are currently earming an economic profit eventualy become "Victims of their own success? Which of the following statements is true? A. A fim can only hope to eam a profit in the long run ifit is abie to continually find new ways to diferentiate its product. B. Any firm that earns an economic profit will attract competitors as long as mere are significant barriers to entering the firm's market C. Competition from new entrants wil raise the price for the product and reduce the firm's economic proft to zero. OD. All of the above. JAB, a German company that now owns both Peet's and Intelligentsia, has been focusing on sales of cold-brewed coffee, which it sells in supermarkets and convenience stores. According to an article in the Wall Street Journal, "Making and distributing cold-brewed coffee, in particular, is challenging and expensive because it requires a lot of coffee beans to extract the flavor." Source: Zeke Turner and Julle Jargon, "The Secretive Company That Pours America's Coffee" Wal Street Journal, March 7, 2018. If cold-brew cofeeis more costy for JAB to produce than is convertional ground coffee r hot coffee sodin cofehouses (JAB sels those types of cofle as wel), why would JAB focus on it? OA JAB is hoping to entice more firms to sell cold-brewed coffee to increase its popularity. OB. JAB is following a strategy of diferentiating its product from those offered by competing firms. OC. JAB isn't worred about making a profi-t is a company that is passionate about cold-brew coffee OD. All of the above.
Transcribed Image Text:The market for athletic shoes is intensely competitive. In 2016, the Sports Authority, one of the firms in the market, decdared bankruptcy and closed ts 500 stores. An Associated Press article discussed the effect of the closings of the Sports Authority stores on Foot Locker's store in the New York City borough of Manhatan, and quoted Foot Locker's CEO as stating "We realized a long time ago that we couldn't be everything to everybody [in one storej. We have defintive brands and experiences." Source: Associated Press, "Foot Locker to Play Up the Store Experience," erainsnewyork.com, August 20, 2010. To maximize profit, a monopolistically compettive firm produces output up to the point where A. marginal revenue equals demand. OB. demand equals average cost. Oc. marginal revenue equals marginal cost D. demand equals marginal cost. A columniet in the Wall Street Journal offers the following opinion of Starbucks: "Starbucks is in some ways the victim of ts success, having attracted increasingly aggressive competitors into what is now a fairly crowded market." Source: James Freeman, "Tragedy of the Starbucks Commons," Wa Street Jumal, January 19, 2019. Do all firms that are currently earming an economic profit eventualy become "Victims of their own success? Which of the following statements is true? A. A fim can only hope to eam a profit in the long run ifit is abie to continually find new ways to diferentiate its product. B. Any firm that earns an economic profit will attract competitors as long as mere are significant barriers to entering the firm's market C. Competition from new entrants wil raise the price for the product and reduce the firm's economic proft to zero. OD. All of the above. JAB, a German company that now owns both Peet's and Intelligentsia, has been focusing on sales of cold-brewed coffee, which it sells in supermarkets and convenience stores. According to an article in the Wall Street Journal, "Making and distributing cold-brewed coffee, in particular, is challenging and expensive because it requires a lot of coffee beans to extract the flavor." Source: Zeke Turner and Julle Jargon, "The Secretive Company That Pours America's Coffee" Wal Street Journal, March 7, 2018. If cold-brew cofeeis more costy for JAB to produce than is convertional ground coffee r hot coffee sodin cofehouses (JAB sels those types of cofle as wel), why would JAB focus on it? OA JAB is hoping to entice more firms to sell cold-brewed coffee to increase its popularity. OB. JAB is following a strategy of diferentiating its product from those offered by competing firms. OC. JAB isn't worred about making a profi-t is a company that is passionate about cold-brew coffee OD. All of the above.
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