Michelle Owns the Largest Florist Shop in Her Town

Multiple Choice

Michelle owns the largest florist shop in her town. Each week, she orders a truckload of flowers from the flower wholesaler. The other two florists in town order only one-third as many flowers. Because Michelle's order fills the delivery truck, the wholesaler sells flowers to her at a lower price than the other florists must pay. How will this situation impact potential new entrants?

A) New florists will be encouraged to enter because they will be energized by the challenge to succeed.
B) The cost differential can easily be offset by creating a demand differential, so it will have little impact.
C) New florists will not be affected because input prices are minor factors in markets.
D) New florists will be discouraged from entering the market because of the difficulty of competing on cost.