Answer:
D. C
Explanation:
As Downtown Coffee Roasters is a premium cafe which is reputed for its superior customer service. The coffee shop also serves gourmet food to its customers, which allows it to charge a premium price. Whereas, Budget Beans is a chain of coffee shops that charges the lowest price in the industry due to its self-service policy. However, Perky's Coffee Inc. has found a balance between these two strategic groups by using automated ordering to free up its employees to work as master baristas and bakers, thus focusing on creating excellent products. It charges a price slightly above that of Budget Beans. In this scenario, Perky's Coffee is following a blue ocean strategy. In blue ocean strategy, organizations pursuit differentiation and low cost at the same time simultaneously which Perky's Coffee Inc. is doing here in this case. Perky's has created a totally new demand by following this strategy quite successfully and has made the competition totally and almost irrelevant.
The economic principle of substitution says that when there are two houses in the same neighborhood with the same size, appeal, and utility, the lower-priced one will tend to sell first.
<h3>The economic principle of substitution</h3>
- According to the principle of substitution, the cost of purchasing a substitute that is just as desired tends to establish the upper limit of value, assuming no inopportune delays.
- A shrewd investor would not spend more on an asset that generates income than it would cost to construct or buy an asset of a similar nature.
- According to this theory, the cost of acquiring a comparable substitute property with the same use, design, and revenue determine the maximum value of a property in most cases.
- For instance, why would somebody pay $1,000,000 for a home when they could pay $750,000 for a different but as appealing home in the same neighborhood?
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a person's regular occupation, profession, or trade.
Answer: B
Explanation: I work for a bank.
The difference in operating income between processing the cat bowls further versus selling them off at the split-off point is -$1,920.
<h3>What is operating income?</h3>
Operating income is the adjusted revenue of a business after all operating costs and depreciation have been taken into account. The charges incurred to maintain the operation of the business are known as operating expenses.
Calculating the operational income difference:
After additional processing, sales income (1000*14) 14000
At the split-off point, sales revenue (1000 x 11) 11000
3000 in additional revenue
Cost Incremental -4920
Increased revenue (loss) -1920
Operating income (loss) difference = -1920
The ability of your company to make money from its operational activities is demonstrated by operating income. The operating income figure is frequently used by business owners to assess the operational success of their enterprise. Potential creditors and investors might be interested in your company's operating income.
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