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:
Verified
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