Solved

In Exchange for a Share in the Revenues Earned on Campus,State

Question 29

Multiple Choice

In exchange for a share in 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 or at university events.
Refer to the information above.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 sell for a lower price.
C) more than 75 cents because demand for CheapFizz will shift to the left.
D) more than 75 cents because other firms must exit the market.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents