When Wal-Mart Decides to Build a New Retail Store in a Town

Multiple Choice

When Wal-Mart decides to build a new retail store in a town, it will decide to build a large store rather than a small store if the large store is expected to earn a greater economic profit. What other motive would Wal-Mart have for choosing to build a large store?

A) A larger store will help Wal-Mart maintain its position as the leading retail company in the world more than a smaller store would.
B) A larger store will give Wal-Mart greater political influence in the community.
C) A larger store may deter entry into the town by a rival firm.
D) Because of economies of scale, the average total cost of production is less for a larger store than a smaller store.