Question 9.18

11. You are thinking of setting up a coffee shop. The market structure for coffee shops is monopolistic competition. There are three Starbucks and two other coffee shops very much like Starbucks in your town already. In order for you to have some degree of market power, you may want to differentiate your coffee shop. Thinking about the three different ways in which products can be differentiated, explain how you would decide whether you should copy Starbucks or whether you should sell coffee in a completely different way.