Suppose a roll of paper towels costs $4 at Sam's Quick Stop, a local quick stop, and the same roll of paper towels costs $1 at Big Supplies, a large, retailer located in a more remote location. If a customer's total cost of travel to Sam's Quick Stop is $2 and is $6 to Big Supplies, which of the following is true?
A)It is cheaper for the consumer to buy the paper towels at Big Supplies.
B)It is cheaper for the consumer to buy the paper towels at Sam's Quick Stop.
C)The consumer is indifferent as to where they buy the paper towels.
D)It is more expensive for the consumer to buy the paper towels at Sam's Quick Stop.

Question

Quizplus · Accepted Answer

The total cost at Sam's Quick Stop is $6 ($4 for paper towels + $2 travel cost), and the total cost at Big Supplies is $7 ($1 for paper towels + $6 travel cost), making Sam's Quick Stop the cheaper option.

Suppose a Roll of Paper Towels Costs $4 at Sam's