Business

Question

Which scenario is an example of market saturation? The single coffee shop in town usually has a long line of customers and tends to stay busy during business hours. There are three shoe stores on one block in town, and they have trouble finding customers and making a profit. A second health club will open because the only health club in town is too crowded to accept new customers. It can be difficult to get reservations at the only upscale Ethiopian restaurant in town, and it is best to call in advance.

2 Answer

  • The scenario that is an example of market saturation is B. there are three shoe stores on one block in town, and they have trouble finding customers and making a profit.
    Market saturation refers to the fact that there is a lot of the same product, so that it is really unnecessary. Here, having three stores which sell the same product on the same block is too much, as people aren't going to visit all three of them, so all of them are going to lack customers, and thus they aren't going to profit at all. 
  • Option B, There are three shoe stores on one block in town, and they have trouble finding customers and making a profit.

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