Firms such as Caribou Coffee and Diedrich Coffee operate hundreds of coffeehouses nationwide while firms such as Dunn Brothers Coffee operate only in four states. How would you characterize these stores?

Question

Quizplus · Accepted Answer

All the firms mentioned operate in the same industry, which is coffeehouse. However, they have different levels of market presence. Caribou Coffee and Diedrich Coffee operate nationally, but they are not dominant enough to be considered as oligopolists. Dunn Brothers Coffee only operates in a limited geographic area, but they still face competition from other coffeehouse chains. Therefore, all the firms mentioned can be characterized as monopolistic competitors.

Firms Such as Caribou Coffee and Diedrich Coffee Operate Hundreds