The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores."Because of declining profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Raising prices is n

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The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores.

"Because of declining profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Raising prices is not a good option, since we are famous for our low prices. Instead, we should reduce our operating hours. Last month our store in downtown Marston reduced its hours by closing at 6:00 p.m. rather than 9:00 p.m. and reduced its overall inventory by no longer stocking any DVD released more than five years ago. Since we have received very few customer complaints about these new policies, we should now adopt them at all other Movies Galore stores as our best strategies for improving profits."


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