Memmie: The greater the population near a restaurant, the more potential customers it has and the greater chance its popularity will spread through word-of-mouth. O'Sullivans Restaurant just opened in the very densely populated town of Redville, so its chances for success are great. Sam: But the more people living in an area, the more restaurants there are in that area, so the more competition each one faces. There are twelve other restaurants serving the people of Redville.

Memmie and Sam seem to disagree about whether:

A. O'Sullivans will fail in its first few months. B. O'Sullivans will serve a different kind of food than the other restaurants in Redville. C. the high population of Redville ensures that O'Sullivan's has a great chance for success. D. word-of-mouth about a restaurant can spread in a densely populated town like Redville.

Question

Business

Eliezer Robertson

20 December, 21:54

Memmie: The greater the population near a restaurant, the more potential customers it has and the greater chance its popularity will spread through word-of-mouth. O'Sullivans Restaurant just opened in the very densely populated town of Redville, so its chances for success are great. Sam: But the more people living in an area, the more restaurants there are in that area, so the more competition each one faces. There are twelve other restaurants serving the people of Redville.

Memmie and Sam seem to disagree about whether:

A. O'Sullivans will fail in its first few months. B. O'Sullivans will serve a different kind of food than the other restaurants in Redville. C. the high population of Redville ensures that O'Sullivan's has a great chance for success. D. word-of-mouth about a restaurant can spread in a densely populated town like Redville.

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Answers (1)

Know the Answer?

Jamir French · Answer 1

the correct option is C) the high population of Redville ensures that O'Sullivan's has a great chance for success.

Explanation:

Selling in a densely populated and highly copeteive area suggets the folowing

higher market share which usually means greater sales, lesser effort to sell more and a strong barrier to entry for other competitors. A higher market share also means that if the market expands, the leader gains more than the others. Strategic location which drives sales due to proximity and ease of access.

Therefore O'Sullivan's has a great chance for success and can use pricing to create competitive advantage.