A Company Sells a Subscription Service for Mowing Lawns

question 109

Multiple Choice

A company sells a subscription service for mowing lawns.Customers typically remain subscribed for 3 years,and they pay $20.00 per month for the service,which means $240.00 ($20.00 × 12 months) per year or $720.00 ($240.00 × 3 years) potential revenue from the customer.In this case,the $720.00 of potential revenue is the:

• A) differentiated segmentation value.
• B) undifferentiated segmentation value.
• C) perceptual mapping value.
• D) ideal point value.
• E) customer lifetime value.

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Definitions:

Labor-Intensive

A type of production process or industry that requires a large amount of labor to produce goods or services, in comparison to capital.

Economic Costs

The total expenses incurred in production, including both explicit costs like wages and implicit costs such as opportunity costs.

Total Revenue

Total Revenue refers to the total receipts from sales of goods or services.

Economic Profit

The profit a business makes after deducting both its explicit and implicit costs, including opportunity costs.