Walmart's "small" supercenters mea- If the number of customers is Q a method is the big store. sure 99.000 square feet and serve an week the average cocal cost per trans- For fewer than Q customers a average of 30.000 customers a week. action is the same for both stores. week, the least-cost method is the The average 7-Eleven store, most of For a store that serves more than Q small store. The least-cost store is not which today are attached to gas sca- customers a week the least-cost always the biggest store. tions, measures 2,000 square feet and serves 5,000 customers a week. Which recalling technology has the Average total cost (dollars per customer) lower operating cost? The answer 7-Eleven has ATC7-Elevon depends on the scale of operation. lowest cost At a small number of customers per week, It costs less per customer to operate a store of 2.000 square 2.00 -....... Walmart has feet chan one of 99.000 square feet. lowest cost ATCWalmart In the figure, the average total cost curve of operating a 7-Eleven store of 1.00 + . . . .. .. ... .. .5.it .. ... 2.000 square feet Is ATC7-Eleven and the LRAC average total cost curve of a store of 99,000 square feet Is ATCWalmart. The dark blue curve is a recaller's long-run 0 5.000 Q 15,000 20.000 25,000 30,000 35,000 average cost curve LRAC. Output (customers per week)The graph shows the ATC curves of a Walmart store and a 7-Eleven and each type of store operates at its minimum ATC. Cost (dollars per customer) + 3- ATC7 - Eleven 2- ATCWalmart UI - 10 15 20 25 30 35 40 45 Output (thousands of customers per week)The store with the lower total cost is O A. Walmart because it is more efficient than the 7-11 O B. The 7-Eleven because its total cost equals ATC, $2, multiplied by 5,000 customers per week, while Walmart's total cost is ATC of $1 multiplied by 30,000 customers per week O C. The 7-Eleven because it has fewer customers per week than Walmart O D. Walmart because its ATC at $1 per customer while the 7-Eleven's is $2 per customer The store with the lower marginal cost is O A. Walmart because at minimum ATC, marginal cost equals ATC, so Walmart's MC is $1 and the 7-Eleven's MC is $2 O B. The 7-Eleven because it has fewer workers O C. Walmart because it has more checkout lanes D. The 7-Eleven because it has fewer customers per week than Walmart, so it needs a lower MC to be able to compete Draw and label each firm's marginal cost curve