Economics (Book Only)
Economics (Book Only)
12th Edition
ISBN: 9781285738321
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 5, Problem 12QP
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The English Premier League currently has no salary cap but is considering implementing one. They are doing this, in part, to reduce payroll disparities across teams that create competitive imbalance.     How would the reduction in payroll imbalance affect the Gini Coefficient for the English Premier League?
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Starbucks has been very successful selling high-priced coffee despite the fact that consumers could easily substitute Starbucks coffee for less expensive coffee or substitute its coffee for less expensive drinks like soda, bottled water, or fitness drinks.  a) Why do you think Starbucks has historically been so successful avoiding substitutes?  b) Do you think its advantage is eroding in this area? If so why? c) If its advantage is eroding, what could the firm do to change this situation?
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