Use the Following Scenario to Answer the Following Questions

question 151

Multiple Choice

Use the following scenario to answer the following questions:
Babak owns a sports practice facility called Boston Batting Cages in Boston,Massachusetts.During the first year of operation,Boston Batting Cages incurred many costs.In that year,Babak spent $5,000 on labor,$2,000 on maintenance,and $1,000 on electricity.Babak took out a loan to open his business,in which he would have earned $1,500,and his previous job,which he could get back at any time,paid him $50,000.
-Boston Batting Cages incurred ________ in implicit costs.

• A) $9,500
• B) $7,000
• C) $51,500
• D) $8,000
• E) $50,000

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Definitions:

Comparison Shop

The act of evaluating similar products or services from different suppliers to determine the best combination of quality, price, and service.

Prestige Pricing

A pricing tactic that involves pricing a product higher than competitors to signal that it is of higher quality.

Superior Quality

Refers to the highest standard of product or service performance that significantly exceeds the requirements and expectations of customers.

Odd Pricing

A pricing strategy that sets prices just below round numbers (e.g., $19.99 instead of $20) to psychologically appeal to consumers by seeming lower.