Author Question: Natalie owns a highly successful bakery and coffee shop, Mocha & Muffins. Others have expressed ... (Read 41 times)

vicotolentino · **on:** Jul 14, 2018

Natalie owns a highly successful bakery and coffee shop, Mocha & Muffins. Others have expressed interest in starting nearly identical shops at various locations. Natalie decides to sell franchises of Mocha & Muffins. Why is this option a less expensive way to increase the distribution of her treats?
A) She will only have to build as many shops as there are available franchisees.
B) The franchisees will be highly motivated to succeed.
C) She will not incur the high costs of constructing and operating more shops.
D) She will be able to obtain low-interest loans for the new locations.
E) She will be able to offer the franchisees free advice about their shops.

Question 2

_____ remain constant regardless of how many products are sold.
A) Variable costs
B) Overhead costs
C) Fixed costs
D) Marginal costs