Question

Brand loyalty is a key issue for monopolistic competitors. In fact, it's the key reason we say that economic profit "tends towards" zero and not automatically becomes zero in the long run (like perfect competition).

Sure there are substitutes for Hostess Cupcakes, but let's be honest, a Little Debbie cupcakes are just terrible. I like Hostess so much more that I'd be willing to pay $3 more per box for my preferred brand. That's brand loyalty.

What THREE brands are you most loyal to, and why? What are the best known substitutes for the products/brands you love. How much of a premium are you willing to pay to keep buying your brand name product? (There must be some threshold where you would switch to a different similar product - don't just say you're willing to pay more)

Answer 1