Economics Assignment help premium essays

Starbucks does market research and discovers that not everyone considers Frappacinnos as necessary as our friends Hansel and Zoolander.  In fact they discover that consumers will readily substitute Frappacinnos with other beverages and that many of its costumers consider Frappaccinos a luxury good.  Starbucks asks you whether they should drop prices.  Illustrate the effect of the price change.  Be sure to fully label the graph and illustrate the gaines and losses in total revenue associated with the change.  What happens to total revenue?  Did you make demand elastic or inelastic?  Why?


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