What Business Lesson Was Learned from the United Breaks Guitars

question 66

Multiple Choice

What business lesson was learned from the United Breaks Guitars video that went viral shortly after it was posted on YouTube?

• A)Negative viral videos posted by customers are not a potential threat to major companies,such as United Airlines.
• B)Major companies can insulate themselves from unhappy customers with call centers.
• C)Companies and their executives can no longer afford to hide behind slick advertising campaigns and press releases to protect their public image against viral threats.
• D)Viral messages cannot damage a company's brand image to the extent that there are significant financial consequences.

Identify the conditions under which firms operate in purely competitive or imperfectly competitive product and labor markets.

Examine the role of occupational licensing and union strategies in influencing labor market outcomes.

Explore the implications of monopsony for wage rates and employment levels.

Understand the mathematical criteria for profit maximization in hiring labor and capital in monopsonistic conditions.

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Definitions:

Accounting Rate

Accounting rate, often referred to as the rate of return, measures the profitability of investments or projects expressed as a percentage.

Net Cash Flows

The total amount of cash being transferred into and out of a business, reflecting the company's overall financial health over a specific period.

Amortization Period

The length of time over which the principal of a debt is scheduled to be paid down through amortization.

Discounted Cash Flow

A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for time value of money.