Final answer:
True. A mom and pop gas station is more likely to use a periodic review system than a chain of department stores, reflecting their simpler operations and smaller scale. This system is often employed in smaller businesses due to its suitability in less complex inventories. The correct answer is option a.
Step-by-step explanation:
It is true that a mom and pop gas station near a remote lake popular with anglers is more likely to use a periodic review system than a chain of department stores. Smaller, family-owned operations like those typically rely on manual inventory checks at set intervals, due to the reduced complexity and scale of their business compared to larger department store chains. Department stores, on the other hand, often use continuous review systems that are automated and more sophisticated, allowing them to track inventory in real-time due to their larger scale and more complex inventory needs.
The existence of small "Mom and Pop firms" like inner-city grocery stores, even when they do not earn economic profits, can be explained by their non-economic values, such as community service, family tradition, and personal satisfaction. Additionally, they might cater to a niche market, offer personalized services, or simply be sustained by the owner's willingness to accept lower monetary returns for non-economic benefits.