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Alecsey [184]
3 years ago
7

In exchange for a share of the revenues earned on campus, State U has granted CheapFizz the exclusive right to sell soft drinks

in the student union and in vending machines on campus. Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus. Prior to the deal, a 12-ounce can of CheapFizz sold for 75 cents. After the deal you would expect a 12-ounce can of CheapFizz to sell for:
A. 75 cents because that is the market price.
B. less than 75 cents because CheapFizz will have greater volume and so can lower its price.
C. more than 75 cents because the demand curve for CheapFizz soda will shift to the left.
D. more than 75 cents because CheapFizz is the only company that can sell soda on campus.
Business
1 answer:
evablogger [386]3 years ago
5 0

Answer:

The correct answer is option D.

Explanation:

The price of a 12 ounce can of CheapFizz is 75 cents.

After a deal with State U, CheapFizz gets exclusive rights to sell soft drink on the campus.

This makes CheapFizz a monopoly firm.

A monopoly firm is a price maker and produces at the point where the marginal cost is equal to marginal revenue. At this point the output level is lower than socially optimal and the price level is higher than socially optimal.

This means that the price of CheapFizz cans will be more than 75 cents after the deal.

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Therefore, the answer is option D.

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Explanation:

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Characteristics of capital projects include (B) usually requires long-range planning and extensive financing.

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<h3>Characteristics of capital projects:</h3>
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Therefore, characteristics of capital projects include (B) usually require long-range planning and extensive financing.

Know more about capital projects here:

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#SPJ4

Correct question:

Characteristics of capital projects include:

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(A) Involves long-lived assets.

(B) Usually requires long-range planning and extensive financing.

(C) Usually has a year-to-year focus.

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