Coast to Coast Bus Lines Acquired the Following Data About

question 175

Multiple Choice

Coast to Coast Bus Lines acquired the following data about the operating cost of three of its top competitors.
Operating cost per seat per mile
Competitor A $.11
Competitor B $.15
Competitor C $.16
Management decides to use the average operating cost per seat per mile as a mark. Coast to Coast per seat is 12.5 cents per mile.

• A) It is equal to the mark
• B) It compares favorably
• C) It compares unfavorably
• D) It compares favorably to the best performing competitor

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Definitions:

Bid

An offer made by an individual or company to buy a good, service, or asset at a specified price.

Ask

The lowest price a seller is willing to accept for an asset in financial markets.

Profit

is the financial gain realized when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Bid-ask Margin

The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask), indicative of market liquidity.