Is macy expecting to benefit from economies of scale

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Assignment:

Macy's CEO Jeff Gennette believes that Macy's has high potential outside of malls and in smaller formats. The department store chain is planning to test several smaller Macy's stores outside of malls. (Source: today.com, September 2, 2020)

a. Thinking of a Macy's store as a production plant, explain why Macy's is opening smaller stores. Is Macy's decision a long-run decision or a short-run decision? Explain your answer.

b. Is Macy's expecting to benefit from economies of scale or does the firm think it is operating where there are diseconomies of scale? Explain your answer.

Reference no: EM133662333

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