JAB, a German company that now owns both Peets and Intelligentsia, has been focusing on sales of

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JAB, a German company that now owns both Peet’s and Intelligentsia, has been focusing on sales of cold-brewed coffee, which it sells in supermarkets and convenience stores. According to an article in the Wall Street Journal, “Making and distributing cold-brewed coffee, in particular, is challenging and expensive because it requires a lot of coffee beans to extract the flavor.” If cold-brew coffee is more costly for JAB to produce than is conventional ground coffee or hot coffee sold in coffeehouses (JAB sells those types of coffee as well), why would JAB focus on it? Ten years from now, would you expect JAB’s economic profit from selling cold-brewed coffee to be higher, lower, or about the same as it is today? Briefly explain.

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Microeconomics

ISBN: 9780135952955

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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