There are two retail stores in Millersburgh. One is a full-service store that typically sells on credit to its customers; the other is a smaller discount store that usually sells for cash. Full-service stores typically charge higher prices than do discount stores for identical items.
1. Does the operating cycle suggest some economic reason for a portion of this price difference? Explain your answer.
2. Can you think of other reasons why a full-service store might charge more than a discount store for the same merchandise?