Retailers should continue to open stores as long as the marginal revenues achieved by opening a new store are greater than the marginal costs.

Question

Quizplus · Accepted Answer

A retailer's advertising costs can be the same in a market that has 1 or 20 stores and distribution costs can be spread out among many stores in a market whereby marginal revenues can easily be much more than marginal costs.

Retailers Should Continue to Open Stores as Long as the Marginal