Barb Has a Hot-Dog Stand near the Ferry Terminal for Centre

question 40

Essay

Barb has a hot-dog stand near the ferry terminal for Centre Island. She pays $500 per month as rent and $3000 per month in wages for the hired help. Variable costs per hot dog come out to be $1.30 and she sells each hotdog for $3.00. In summer months, she is able to sell 4500 hotdogs in a month. Recently, another hot dog vendor opened his stand across the street. To attract and retain her customers, she added a free soda can which increased her variable costs by 20 cents. To make things worse, the rent was also increased by 15%. What is the change in her monthly net income due to these recent changes. Assume that the monthly sale figures remain at 4500 units.

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Definitions:

Real Differences

Actual disparities or distinctions that exist between entities, concepts, or phenomena.

Chance

The occurrence of events in the absence of any obvious intention or cause.

Naturalistic Observation

A research method in which subjects are observed in their natural environment without any manipulation by the researcher.

Laboratory Observation

A research method in which subjects are observed in a controlled environment to ensure consistency and control over variables.