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3) Why do you think Starbucks increased its prices by 1%, and do you believe that...

3) Why do you think Starbucks increased its prices by 1%, and do you believe that this action is risky, or a safe bet?

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Answer #1

Starbucks is considered as a luxury product with many of the brand loyals in it as a result of which many people are brand loyals he will prefer Starbucks irrespective of the price as a result of which even if you increase the price by 1% what happens is that due to the higher amount of brand loyalty present the quantity demanded decreases proportionately increasing the overall revenue and that is the reason why in this way you can consider that increasing the price can be considered as a not very risky but and rather a safe bet on the whole

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