un x SCC PortalGuard -SCC Portal Lo X Assignments: Microec onomics Chapter 12 HW ect.mheducation.com/flow/connect.html Saved In the News: What's Behind Starbucks' Price Hike? The Coffee Company Will Raise Drink Prices in October, Even as Other Chains Crowd the Market with Similar (and Cheaper) Products Starting on Cctober 3, the prices on lattes, cappuccinos, drip coffee, and other drinks will go up 5 cents at company-operated stores in North America. Starbucks is also jacking up the price of its coffee beans by roughly 50 cents per pound, or an average of 3.9 percent. The timing is certainly odd. For a while now, Starbucks has been struggling with labor disputes. Rivals McDonald's, Dunkin' Donuts, and Canadian restaurant chain Tim Horton's are steaming into its turf.... A Confident Company If Starbucks were really worried about any of these issues, the last thing its senior execs would consider is a price hike. In fact, Starbucks' dominant market position gives it unique pricing flexibility. Every week, the company succeeds in persuading nearly 40 million people to buy pricey espresso drinks, "The company is selling a product that has become part of our daily lives, said Kristine Koerber, an analyst at JMP Securities. "Raising prices by a nickel is not going to meet any resistance." -Stanley Holmes 2015. All ngts reserved Source BusinessWeek, www.businessweek.com, September 22, 2006 Used wth permission of BloombergLP.Copyright < Prev 8 of 10 Next > Salem Commun x O SCC PortalGuard - SCC Portal Lo x Assignments: Microeconomics x Chapter 12 HW newconnect.mheducation.com/flow/connect.html pter 12 HW i Saved Help Sa If Starbucks were really worried about any of these issues, the last thing its senior execs would consider is a price hike. In fact, Starbucks' dominant market position gives it unique pricing flexibility. Every week, the company succeeds in persuading nearly 40 million people to buy pricey espresso drinks. "The company is selling a product that has become part of our daily lives, said Kristine Koerber, an analyst at JMP Securities. "Raising prices by a nickel is not going to meet any resistance." ats -Stanley Holmes eBook Print Source: BusinessWeek, www.businessweek.com, September 22, 2006. Used with pemission of Bloomberg LP Copyright 2015. All rights reserved. eferences (a) By how much could unit sales of coffee beans at Starbucks decline after the 2006 price increase without reducing total revenue? Instructions: Enter your responses as a positive percent rounded to one decimal place. (b) If the price elasticity of demand for Starbucks is 0.20, by how much would coffee bean unit sales have fallen? Instructions: Enter your responses as a positive percent rounded to two decimal places. < Prev 8 of 10 Next > raw cation 00