While the Size of the Tail in the Long Tail

question 61

Multiple Choice

While the size of the tail in the long tail phenomenon is disputable, one fact that is critical to remain above this debate is that:

• A) traditional brick and mortar retailers offer selections that cannot be rivaled by Internet pure-plays.
• B) energy costs and worker wages drive up the costs of running stores like Netflix.
• C) selection attracts customers, and the Internet allows large-selection inventory efficiencies that offline firms can't match.
• D) the turnover rate of obscure titles in traditional video rental stores is only slightly higher than those for Internet pure-plays.
• E) the cost of store maintenance and real estate makes stores such as Netflix unattractive.

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Definitions:

Total Utility

The total satisfaction received from consuming a particular quantity of a good or service.

Average Utility

The total utility received from a certain amount of goods or services divided by the number of goods or services consumed.

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the additional satisfaction gained from consuming an additional unit decreases.

Plastic Bins

Containers made of plastic material used for storing or transporting items.