When It Became Apparent That the Drawing Power to a Particular

question 37

Multiple Choice

When it became apparent that the drawing power to a particular Walmart store was very strong, because every day there would be long lines and empty shelves despite all cashier lanes open and plenty of stockers, Walmart opened another store within 10 miles of that store to try and reduce the amount of business at the over-demand store. This is an example of utilizing ________, but for the good of the retailer.

• A) artificial barriers
• B) cannibalization
• C) congestion
• D) fringe trading
• E) drawing power

---

Definitions:

Scale Economies Index

A measurement that assesses the advantages a business gains due to the scale of its operation, typically resulting in reduced costs per unit as production increases.

Cost-Output Elasticity

The responsiveness of the cost of producing a good or service to changes in the level of output.

Diseconomies of Scale

A situation where a business grows so large that the costs per unit increase. It occurs when economies of scale no longer function for a firm.

Production Function

An equation or model that describes the relationship between inputs used in production and the output produced.