Train collector Jack McCoy has decided to open a store that sells train memorabilia. After 18 months in business, he has noticed most of his sales are to the same small group of customers (about 40 people), even though records show there are over 200 active train collectors within a 80-kilometre radius of the store. Which of the following does this retailing experience support?
A)the optimizer principle
B)the min-max rule demand
C)the 80/20 principle
D)the rule of demand

Question

Quizplus · Accepted Answer

The retailing experience supports the 80/20 principle, also known as the Pareto principle, which states that roughly 80% of effects come from 20% of causes. In this case, it means that about 80% of sales come from 20% of customers. Since Jack McCoy's sales are mostly to the same small group of customers, it suggests that these customers represent the 20% who are responsible for the majority of sales, while the other 80% of customers are responsible for only a small percentage of sales.

Train Collector Jack McCoy Has Decided to Open a Store