Compare the profitability of the provision shops with that of the supermarkets. Explain two demand factors which might have caused the change in the supermarkets’ share of the industry. To what extent are large supermarkets more cost efficient than smal

The supermarkets being bigger then the provision shop, they would be able to enjoy greater economies of scale. The operational costs of the supermarkets are spread out and therefore theirs total cost would be lower then the provision shops. Most of the time, the supermarkets such as NTUC would capture bigger market share compared to a provision shop as they are able to provide a larger variety of goods compared to the provision shop With the ability to purchase in bulk would lower the cost price and in turn it could sell at a much cheaper rate compared to the other to the provision shop as they could not enjoy the benefits of economies of scale. Therefore the supermarkets would be profitable then the provision shop

The supermarkets over the years have grown into a more profitable business then t...