Question

article summary
changing tastes, preferences, and demographics in the retail beauty industry has some cosmetic companies adapting their product lines. in an industry with an expected annual growth rate of 6 percent over the next 5 years and expected total retail sales reaching over $425 billion by 2030, some companies are looking to incorporate sustainability in both their products and their operations. two major companies leading the way are ulta beauty and sephora. each of these companies has a clean or conscious beauty tab on their websites, allowing customers to shop for brands based on sustainability. sephora also has a \clean + positive planet\ tab, which lists 40 brands that meet specific climate goals. in europe, major beauty product retailer douglas has expanded its offerings of clean beauty products, focusing on organic ingredients and recycled and recyclable packaging. douglas has recognized a need to adapt to customer expectations, of which sustainability is one of the largest.
source: clara ludmir, \how leading beauty retailers are embracing sustainability in 2023,\ forbes, september 22, 2023.

refer to the article summary. by marketing to environmentally conscious customers, companies like ulta beauty, sephora, and douglas are trying to set their businesses apart from competing cosmetic retailers. all else equal, if these companies concepts remains successful, in the long run we would expect them to experience

○ increased competition and lower economic profits.
○ rising average costs and long - run economic profits.
○ increased competition and higher economic profits.
○ government regulation and no additional competition.

Explanation:

By targeting environmentally - conscious customers, these companies differentiate themselves. This can attract more customers and potentially lead to long - run economic profits. While there may be higher initial costs to meet sustainability standards (rising average costs), the long - term gain can be significant. There is no indication of decreased competition or government regulation being the main outcome.

Answer:

rising average costs and long - run economic profits.