Well, the store's name is on one side of the bag.

[kadioguy]

[From a TOEIC test]

Man: Tanya, when did we start selling these reusable grocery bags? Has it been two weeks? I want to see our customers using them to carry the groceries home from our store, but nobody is buying them.

Woman: Well, they are rather simple. They are in plain colors and only have the store's name on them.

Man: What can we do to make them more interesting?

Woman: Well, the store's name is on one side of the bag. What if we asked some local artists to design images to put on the other side?

Man: I like that. I'll get an ad in the local newspaper about this, asking any interested artists to contact us.

[Source]
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1. Unlike the red text, which is in the plural, the blue text (the bag) is using the singular. Why? Can the following apply to this case?

[From the Practical English Usage 3rd 68.2]

generalisations with singular countable nouns
Sometimes we talk about things in general by using the with a singular countable noun.

Schools should concentrate more on the child and less on exams.

2. However, I think both forms (the bag and the bags) can be used in the case. What do you think?

 

[jutfrank]

In her second sentence, the woman is thinking about the design of the bag, as a single thing. Although there are many bags, there's only one single design. In the other sentences, they're talking about the multitude of products, so they use the plural.

 

[Tarheel]

I wouldn't space between different parts of the same conversation, but apparently that's the way they do things there. Also, I would put (or place) an ad in the local newspaper.

 

[kadioguy]

In her second sentence, the woman is thinking about the design of the bag, as a single thing. Although there are many bags, there's only one single design.

Do you think this version would work?

Well, the store's name is on one side of the bags.

 

[jutfrank]

As I said, she's talking about one design, consisting of two sides. One of the sides could include the store's name.