Reynold's Is a Grocery Chain That Has Always Catered to Mid-Market

question 77

Multiple Choice

Reynold's is a grocery chain that has always catered to mid-market customers. However, the owner, Mal, has noticed that an influx of new residents are buying mostly the lower-cost products and products on discount. To attract customers, Mal decides to make a gradual switch to the discount store format, but to do this, he will have to cut costs wherever possible. Which of the following types of service should Mal avoid in order to lower costs?

• A) limited service
• B) self-selection
• C) full-service
• D) self-service
• E) limited-selection

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Definitions:

Marginal Revenue

The additional revenue that is gained from selling one more unit of a product or service.

Marginal Cost

Expenses incurred from making one more unit of a product or service.

Average Revenue

The mean amount of money earned per unit sold, calculated by dividing the total revenue by the quantity of units sold.

Marginal Revenue

The additional income gained from selling one more unit of a product.