Tom gets an offer that someone is interested in buying his business. After some though, Tom chooses not to sell his clothing rental business and then finds out that the potential buyer will now try to drive him out of business by setting up across the street. Monopolistic competition allows for easy entry and exit into a market that is profitable and results in a reduction in long term profits. This is also a good example of the Hotelling Model where similar firms setup near each other to split the market.
See more: barriers to entry, demand shifts, duopoly, free lunch, hotelling model, imperfect competition, invisible hand, marketing, mergers, monopolistic competition, NSTAFL, product differentiation, supply shifts, zero profit
Ben is getting a little tired of Pawnee, but he’s only two stamps away from his “free” meatball sub. Unfortunately, his card is expired. He’s a bit sad about it, but those stamps are essentially a sunk cost. The card itself is a good example of ways that firms price discriminate and offer discounts to bulk shoppers.
Ron has carefully hidden his birthday information from his friends, but Leslie uncovers the date when Ron decided to get a free scoop of rum raisin ice cream on his birthday from Baskin Robbins. While he didn’t realize it at the time, his free scoop of ice cream eventually cost him an important piece of personal information he was trying to hide.