Mercedes-Benz of San Francisco advertises on the radio that it has been owned and operated by the

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Mercedes-Benz of San Francisco advertises on the radio that it has been owned and operated by the same family in the same location for 50 years (as of 2012). It then makes two claims: first, that it has lower overhead than other nearby auto dealers because it has owned this land for 50 years, and second, it charges a lower price for its cars because of its lower overhead. Discuss the logic of these claims.

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Managerial Economics and Strategy

ISBN: 978-0321566447

1st edition

Authors: Jeffrey M. Perloff, James A. Brander

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