If Panera Bread's "clean food" strategy succeeds and customers are willing to pay higher prices for their menu items, the company will
A)no longer be monopolistically competitive.
B)continue to earn substantial economic profits in the long run.
C)eventually suffer economic losses, as do all fast-casual restaurants.
D)likely attract competitors that offer the same kind of food, and all else equal, eventually economic profits will be competed away.

Question

Quizplus · Accepted Answer

If Panera's "clean food" strategy succeeds, it is likely to attract competitors who offer similar types of food, leading to increased competition and a reduction in economic profits over time. While the company may earn higher profits in the short run, in the long run, competition is likely to reduce those profits to a more normal level. Therefore, option D is the best choice.

If Panera Bread's "Clean Food" Strategy Succeeds and Customers Are