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Name a product (STARBUCKS) that you regularly purchase from a firm that operates in an oligopolistic...

Name a product (STARBUCKS) that you regularly purchase from a firm that operates in an oligopolistic industry. Explain why the product and firm fit the model of oligopoly. Think about the TV commercials and/or print advertisements that you’ve seen from this industry: What interdependence have you noticed between the firm you selected and its rivals in terms of product differentiation, price leadership, or price competition? Explain your answer. The Product is Starbucks. Any help is much appreciated.

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Answer #1

Starbucks Coffee is the product that operates in the oligopolistic industry in the sense that there are few other firms in the same. Costa Coffee and Cafe Coffee Day are examples of rivals. The Starbucks fit in the oligopoly because the prices are set based on rivals action depicting the interdependence in the decision making. All the players in this industry fight for market share and merely for the revenues. There is no price competition and only market share is the key. We can also observe the price leadership in the sense if a price is set by Starbucks then other rivals follow. Thus this reflects an oligopolistic situation.

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