When a Business Is Considering Whether to Replace Old Equipment

question 31

True/False

When a business is considering whether to replace old equipment with newer equipment, the cost of operating the old equipment, compared to the cost of operating the new equipment, is relevant information to the business decision.

---

Definitions:

Price Discrimination

A method of pricing in which a provider charges different prices for virtually identical goods or services in different market areas.

Electric Heating

A system of converting electric energy into heat for warming indoor spaces, typically regarded as more efficient than traditional heating methods.

Heating Substitutes

Alternative heating sources that can replace the primary heating method, including electric heaters, solar heating, and geothermal heat pumps.

Price-Discriminating

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on various criteria.