The Fixed Costs of WeBuy&Sell

question 21

Multiple Choice

The fixed costs of WeBuy&Sell.com,an e-commerce website,make up about 90 percent of the total costs incurred by the company.However,since its primary means of communication is web advertising,WeBuy&Sell.com has variable costs as low as 10 percent of its total costs.This allows WeBuy&Sell.com to earn high profits at a very low cost.According to the given scenario,WeBuy&Sell.com has _____ scalability.

• A) zero
• B) low
• C) infinite
• D) high

Understand the use and objectives of comparative advertising.

Comprehend the role of reminder advertisements and their effectiveness.

Recognize the significance of pioneering advertisements and when they are used.

Identify advocacy advertisements and their purposes.

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Definitions:

Willingness to Pay

The maximum amount an individual or entity is prepared to pay for a good or service, reflecting the value they place on it.

Proportional

A relationship between two quantities where they increase or decrease at the same rate.

Network Externalities

The effect that an additional user of a good or service has on the value of that product to others, often positive in the case of products that become more valuable as more people use them.

Significant

Importance in a statistical or substantive sense, often used to describe findings that are not likely to be due to chance.