When Wal-Mart Decides to Build a New Retail Store in a Town

question 248

Multiple Choice

When Wal-Mart decides to build a new retail store in a town, it will decide to build a large store rather than a small store if the large store is expected to earn a greater economic profit. What other motive would Wal-Mart have for choosing to build a large store?

• A) A larger store will help Wal-Mart maintain its position as the leading retail company in the world more than a smaller store would.
• B) A larger store will give Wal-Mart greater political influence in the community.
• C) A larger store may deter entry into the town by a rival firm.
• D) Because of economies of scale, the average total cost of production is less for a larger store than a smaller store.

---

Definitions:

Energy Loss

The reduction in energy as it moves through the trophic levels of an ecosystem; often described in the context of the inefficiency of energy transfer between levels.

Tertiary Consumers

Carnivores that eat secondary consumers; they are often apex predators in their ecosystems.

Secondary Consumers

Organisms that feed on primary consumers in an ecosystem; they are typically carnivores or omnivores.

Secondary Consumers

Organisms, typically animals, that obtain energy by consuming primary consumers, which are herbivores.