Buying Online Can Be Complex

question 18

Short Answer

Buying online can be complex. Retailers display the prices of products separately from shipping charges and taxes, making it difficult to know the price including all charges and taxes. (a) How would a rational consumer choose between retailers? (b) Some consumers may just focus on product prices, without considering shipping charges and taxes. Which behavioral bias do they suffer from?

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Definitions:

Break-even Sales

Break-even sales represent the amount of revenue needed to cover all fixed and variable costs, indicating the point at which a business neither makes a profit nor incurs a loss.

Break-even Sales

The level of sales at which a business generates revenue exactly equal to its costs, resulting in no profit or loss.

Consumer Division

A segment within a company focused on selling products and services directly to consumers, as opposed to business or commercial clients.

Break-even Sales

The amount of revenue needed to cover both the variable and fixed costs of a business, resulting in neither profit nor loss.