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Suppose You Have Just Opened a Store to Sell Espresso

question 157

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Suppose you have just opened a store to sell espresso machines.Both you and a competing store buy this machine from a manufacturer for $130 each.Your competitor who has a store of the same size as yours is currently selling about 10 machines a month at a price of $200 per machine.You expect to sell about 6 machines a month at a price of $220 per machine.If you lower your price, you expect to make a loss.Which of the following could explain why your competitor is able to profitably sell the machine at a lower price although the cost of purchasing the machine is the same for the both of you?


Definitions:

Microbiology

The branch of science concerned with microorganisms and their effects on other living organisms.

Surface Anatomy

The study of the external features of the body and their relationship to deeper structures, as visible to the naked eye without dissection.

Organelle

Specialized structures within a cell, each performing specific functions necessary for the cell's life, such as mitochondria, the Golgi apparatus, and the nucleus.

Tissue Types

Categories of tissues in the body, including epithelial, connective, muscle, and nervous tissues, each serving specific functions.

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