Author Question: Consider a Wal-Mart supercenter and a 7-Eleven store. In the long run, (Read 94 times)

Arii_bell · **on:** May 24, 2019

Consider a Wal-Mart supercenter and a 7-Eleven store. In the long run,
◦ Wal-Mart or 7-Eleven may have economies of scale depending on how many customers are served.
◦ Wal-Mart will definitely have lower average costs because supercenters serve many more customers.
◦ The 7-Eleven store will definitely have lower average costs because their small stores are cheaper to build.
◦ Wal-Mart's average total cost will decline faster than the 7-Eleven store and experience diseconomies of scale.
◦ The 7-Eleven store's average total cost will be lower than Wal-Mart's and always experience economies of scale.

shailee · **Reply #1 on:** May 24, 2019

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