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A phenomenon in the retail merchandising of food and clothing in the United States and the United Kingdom is the growing popularity of private-label (also called store-brand) products. These products are priced at a lower level than the premium national brands. Use the concepts of price elasticity and relevant cost to explain the profitability of these products from the point of view of

a. The retail stores that sell these private-label products. b. The manufacturers of these private-label products. If you were the manager of a national premium brand, what would you do to fight the growing competition of private labels?