Normally, businesses operate at a profit. In other words, they sell their products to customers for more money than the products initially cost. This pricing structure permits businesses to sustain themselves over time. The Stop and Go Supermarket, however, sells its milk for less money than it costs. Which of the following, if true, would best explain why the pricing structure for milk makes economic sense for Stop and Go?
A: Stop and Go directly competes with several lower-priced markets and feels it must match their prices in order to keep its customers.
B: Because Stop and Go does not carry premier brands of milk, it feels an obligation to sell its lesser brands at a loss.
C: Milk is a commodity good, and Stop and Go believes all of its customers deserve the right to purchase commodity goods at reasonable prices.
D: Low prices for milk attract large numbers of customers to the store, and these customers purchase many additional profitable items.
Choose A, B, C or D as your solution.
D