Managerial Economics 13th Edition by James McGuigan,Charles Moyer,Frederick Harris

Exercise 14

The long competition between Subway and Quizno's subshops took price from $6 to $5 for selected Footlongs. Eventually, Quizno's dropped price another dollar to $4 with its Torpedo product. Market share rose for Quizno's relative to its head to head Footlong competition with Subway but margins suffered so much that Quizno's ingredient budgets had to be reduced substantially. Today, Subway specializes in upscale ingredients on six-inch $7 subs. Explain who came out ahead in this competition. How