When Walmart Decides to Build a New Retail Store in a Town

question 71

Multiple Choice

When Walmart 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 Walmart have for choosing to build a large store?

• A)A larger store will help Walmart maintain its position as the leading retail company in the world more than a smaller store would.
• B)A larger store will give Walmart 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.

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