If a store like hhgregg has higher costs than a comparable Best Buy store, the only way it can have higher profits is if
A) it has more locations than Best Buy.
B) its marginal revenue is lower than Best Buy's.
C) the demand for its goods is higher than Best Buy's.
D) it sells the quantity associated with its minimum average total cost.

Question

Quizplus · Accepted Answer

If hhgregg has higher costs, it can still achieve higher profits if the demand for its goods is higher, allowing it to sell more or at higher prices than Best Buy, offsetting the higher costs.

If a Store Like Hhgregg Has Higher Costs Than a Comparable