From the case in 2004 explain the logic for a price


In 2004, Starbucks announced that it will increase prices at its stores before the end of year. Analysts expected prices to rise by 4% to 5%.

According to Starbucks prices went up to adjust for increases in dairy products and rents.

(1) From the case in 2004, explain the logic for a price increase from Starbucks' perspective.

(2) Can you discuss the effect of operating leverage on why Starbucks had to close about 600 stores in 2008.

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Financial Management: From the case in 2004 explain the logic for a price
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