December 1, 2008 Econ 191DA Problem Set #6 1. The price differential between Nyquil and private label substitutes is that the substitutes cost roughly anywhere from 10-50% less than standard Nyquil does. Yes, there are close substitutes available for Nyquil such as generic or store brands. Nyquil is a valuable brand because even though their product of cough medicine is the same as many other substitutes such as generic branded products, people will still pay more for the exact same product due to brand recognition and the fact that they are comfortable with that brand name. 2. Generally in most grocery stores white bread is placed on the upper shelves in order to attract people to that bread more so than other bread products. Also, from going to the grocery store in person it is easy to see that generally speaking the higher priced products are placed higher up on shelves than other products while the lower priced or sale items are near the bottom of the shelves. 3.
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