Some smaller retailers often go out of business when Walmart opens a new store. The most likely reason for this development is that:
A) Walmart practices unfair pricing methods that reduce consumer surplus over time.
B) consumers in those areas receive no consumer surplus from Walmart.
C) consumers in those areas receive a larger consumer surplus from shopping at Walmart than from the smaller stores.
D) smaller stores increase prices to compete.

Question

Quizplus · Accepted Answer

Walmart's ability to offer lower prices and a wide variety of goods increases consumer surplus, making it more attractive to consumers than smaller retailers.

Some Smaller Retailers Often Go Out of Business When Walmart