The thing a lot of people don’t understand about e-commerce is the degree to which it is a scale business,” says Jeff Bezos, CEO of Amazon.com. Where a conventional retailer might have to double its capital spending to double sales, Amazon’s costs are largely fixed. “Once our software is written, we can handle a lot of customers with it.” Explain what this paragraph means.
Answer to relevant QuestionsWhat is the economist’s interpretation of costs? What does the following statement mean: “the concept of cost is far richer (pardon the pun) than the dollars and cents you hand over at the cash register.”?a. Costs are ...If average fixed costs equal $40 and average total costs equal $100 when output is 10, then total variable costs when output is 10 must be:a. $40b. $60c. $600d. $6,000Explain what is different between firms in monopolistic competition and firms in oligopoly? What does this difference mean for prices and quantities and for economic profit.Magazines are sold both through newsstands and subscriptions. Advertising accounts for up to one-half of the revenues of magazines like Time and Sports Illustrated. How should a publisher determine the price of subscriptions ...What is the creditor-owner conflict? Explain why 100 percent equity might be inefficient. Explain why 100 percent debt might be inefficient.
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