Netflix offers its subscribers a selection of over one hundred thousand 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 fact that Netflix can offer over one hundred thousand titles while its rivals can only offer up to three thousand indicates a scale advantage for Netflix. Scale advantage means that companies benefit from economies of scale due to their larger size, which allows them to operate more efficiently and offer lower prices or a wider variety of products/services than their smaller competitors.

Netflix Offers Its Subscribers a Selection of Over One Hundred