Question

Two college students, Mary and Maggie, are spending spring break in Florida. Mary buys a cup of coffee each morning at the local Starbucks rather than from one of the local coffee shops. Maggie claims that Mary is irrational because she never purchases Starbucks coffee at home, and Starbucks coffee costs more than the coffee sold by local shops. An economist would most likely explain Mary’s behavior by suggesting that

Answer 1

Answer:

An economist would most likely explain Mary’s behavior by suggesting that the Starbucks brand name is consistent of quality.

Explanation:

Mary believes that Starbucks coffee is of better quality than local coffee shop coffee because it is associated with a popular brand. A brand name can be one of the most power tools that a company has. It gives the consumer an assurance of quality and they know what to expect when they buy a product.