Internet Retailers Serve a Larger Geographic Area with Comparably Smaller

question 11

Multiple Choice

Internet retailers serve a larger geographic area with comparably smaller infrastructure and staff. This fact suggests that Internet businesses are more _____.

• A) centralized
• B) decentralized
• C) capitalized
• D) vertically integrated
• E) scalable

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Definitions:

Income Effect

Changes in economic or personal income and the resulting impact on how much of a product or service is sought after.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute away from more expensive goods toward cheaper ones.

Total Utility

The total satisfaction or benefit received by consuming a certain quantity of goods or services.

Utils

A hypothetical unit of measure used to quantify the satisfaction or utility that a consumer derives from consuming a good or service.