Tony BIs Attempting to Start a Landscaping Business

question 4

Multiple Choice

Tony B.is attempting to start a landscaping business.He estimates that to break even, he will need about 140 customers.He believes he will lose approximately $500 per customer for each customer fewer than the 140.At the moment, he believes that there is an 80% probability that he will be able to secure at least 130 customers and that there is a 50/50 chance that demand will be greater than 150 customers.He has several marketing research firms offering (for a price, of course) to conduct a survey that will provide additional information regarding the probability of demand.How much should he be willing to spend if he decides to have a survey made?

• A)≅ $4,000
• B)≅ $3,000
• C)≅ $5,000
• D)≅ $2,700

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Definitions:

Substitute Good

A product or service that can be easily replaced with another by consumers, often because it performs a similar function.

Price of Fish

The cost for which fish is sold in the market, influenced by factors such as species, availability, demand, and fishing costs.

Equilibrium Quantity

The quantity supplied and demanded at the equilibrium price, where the quantity that buyers are willing to buy is equal to the quantity sellers are willing to sell.

Bulletproof Vests

Protective clothing designed to absorb or deflect bullet impacts, providing safety to the wearer from firearm projectiles.