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Gap announced that it will close 175 (nearly 26 percent) of its North American stores. It will terminate an unknown number of workers and cut

Gap announced that it will close 175 (nearly 26 percent) of its North American stores. It will terminate an unknown number of workers and cut 250 headquarters jobs. Thinking of a Gap store as a unit of capital, explain why Gap is reducing the number of stores and workers. Is Gap making a long-run decision or a short-run decision? Is Gap taking advantage of economies of scale?

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