Collusion is common in oligopoly and monopolistically competitive industries.
Indicate whether the statement is true or false
Question 2
Juicy Couture has been successful in selling women's clothing using an unusual strategy.
According to an article in the Wall Street Journal, the key to the firm's strategy is to limit distribution to maintain the brand's exclusive cachet, even if that means sacrificing sales, a brand-management technique once used only for high-end luxury brands. In 2006, Juicy clothes were sold in only four department stores: Neiman Marcus, Saks, Bloomingdale's, and Nordstrom. In 2006, its sales have more than quadrupled since 2002.
Source: Rachel Dodes, From Track Suits to Fast Track, Wall Street Journal, September 13, 2006.
How does limiting the number of stores in which Juicy's products are sold contribute to its success?
A) It enables Juicy to price its products at a premium and differentiate them from lower-priced products.
B) It helps establish Juicy's products as luxury items favored by the very wealthy.
C) By sacrificing sales, the company was able to focus on producing high-quality products.
D) Maintaining the exclusivity of a product increases the demand for the product.
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