Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that:
A. consumers are boycotting local retailers.
B. Wal-Mart engages in illegal acts of monopolization.
C. there are diseconomies of scale in retail sales.
D. there are economies of scale in retail sales.
E. Wal-Mart is managed by ruthless business people.
Answer: D
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Which of the following countries is a middle-income country, which over the past century had a higher rate of economic growth than the United States?
a. Japan b. Mexico c. Canada d. Argentina
The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to just one type of customer b. the costs of arbitraging the price difference across markets is small c. the manufacturer acquires the distributer in the higher priced market d. competition provides little ability for the manufacturer to price above marginal cost