Netflix offered its subscribers a selection of over one hundred thousand DVD-by-mail titles, while other video rental firms can only offer as much as three thousand. This presents a significant _____ for Netflix over its rivals.
A) marginal cost
B) price advantage
C) variable cost
D) studio preference
E) scale advantage

Question

Quizplus · Accepted Answer

The correct answer is E) scale advantage. This is because having a significantly larger selection of DVD titles (over one hundred thousand compared to three thousand) indicates that Netflix can leverage its size and the breadth of its offerings to gain an advantage over its competitors. This is a classic example of a scale advantage, where a company's larger size or scope of operations allows it to outperform competitors.

Netflix Offered Its Subscribers a Selection of Over One Hundred