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In this specific case there are company-owned stores and franchises. Suppose tha

ID: 432485 • Letter: I

Question

In this specific case there are company-owned stores and franchises. Suppose that Just Cooked wanted to get out of the business of running stores and therefore sold off all the company-owned stores to franchisees. That means that now ALL stores are franchises. Assuming demand distributions remained the same, how would the number of cupcakes ordered when all stores are franchises compare to when some of the stores are company-owned?

A) More cupcakes would be ordered if all stores were franchises

B) Less cupcakes would be ordered if all stores were franchises

C) The same number of cupcakes would be ordered. It doesn't matter if stores are company-owned or a franchise

Explanation / Answer

I THINK THE ANSWER IS A BECAUSE

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