Answer:
Explanation:
Product vs Service Business
While it may seem to go against traditional thinking, in some ways there is very little difference between product based and service based companies. In actuality, both sell a product. The distinction between the two is that the product business sells a physical, tangible product, while the service business owner sells his skills as the primary product. In the service-based business, customers purchase the skills of a service provider or owner, such as a plumber or lawyer, This type of business has a strong emphasis on the client relationship and makes the customer's user experience very important. Product-based businesses, on the other hand, deliver physical products that are reasonably consistent in quality for each customer, making the customer experience fairly predictable.
Local or Global Consumer Markets
In general, when consumers are looking for new solutions they try to distinguish the different services/products of business and industry in the locality where they reside. As such, businesses need to target their product and service based businesses to the appropriate markets. Consumers located anywhere in the global market can purchase a product via the internet as long as they can have their purchase delivered locally and cost effectively. However, most service businesses can only provide services to customers within their local target market. For example, while a computer store can ship computers all over the world, a hairstylist will only attract clients within a reasonable driving distance from her home or business. As a result, businesses need to consider how their customer base will influence their marketing efforts.
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Answer:
The average operating cost is $0.46 per mile
In deciding whether to to her use her own car or rent a car the costs are analysed below:
Variable operating cost is a relevant cost
Depreciation is not relevant as it is already cost and also it is sunk cost
insurance is not relevant as well
automobile tax and license is not relevant as it would be paid regardless of the option chosen
Explanation:
The average cost comprises of the variable operating cost per mile as well as the fixed operating cost per mile
variable operating cost per mile is $0.06
fixed cost operating cost=fixed costs/total miles driven=($3,350+$1,700+$900+$450)/16000=$6400
/16000=$0.40
average cost per mile=$0.06+$0.40=$0.46
Answer: Economic Surplus : $12
Explanation: Economic surplus is the difference between benefit and cost.
In this case, since he is working as a math tutor, he will get $45, there is no other cost. But if he goes for a movie, he will have to spend $12 on movie, which is the cost he needs to bear. The economic surplus is $12 which is not spent on the movie and worked as a math tutor.