Question

Retail experts would agree that a certain marketplace is _____ if the number of stores in relation to the number of households is so large that to engage in retailing is unprofitable or marginally profitable.

1) understored
2) saturated
3) overstored
4) overmarketed
5) over-spaced

Answer 1

A marketplace is considered saturated when there are so many stores that retailing becomes unprofitable or marginally profitable, as can happen in monopolistically competitive markets like the Mall of America.

Step-by-step explanation:

Retail experts would agree that a certain marketplace is saturated if the number of stores in relation to the number of households is so large that to engage in retailing is unprofitable or marginally profitable. In markets characterized by monopolistic competition, such as the Mall of America, there is a large number of stores selling differentiated products, which can lead to a saturation of the market if supply greatly exceeds demand. Conversely, a thin market has few buyers and sellers and can suffer from imperfect information, while a thick market has many of each and is generally preferred for retail health.