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.

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Definitions:

Sears Tower

A landmark skyscraper located in Chicago, Illinois, known for its significant height and architectural design, though now called the Willis Tower.

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Principles governing the usage, operation, and representation of numbers in mathematical contexts or everyday life.

Number Expression

A mathematical phrase that represents a specific quantity or amounts using numbers and operational symbols.