20 Jul HOW MUCH WOULD YOU BE WILLING TO PAY FOR THE INFORMATION?
Go to the Internet site About.com (http://www.about.com) and answer the following questions. Your se Show more Go to the Internet site About.com (http://www.about.com) and answer the following questions. Your search should include the stuff that the website is about and also should explore the topics linked at the bottom of the screen such as About Us Advertising Info and Be a Guide. a. What services does About.com provide? How are those services delivered? Who is the customer? What does it charge for those services? When About.com goes to advertisers to try to get them to advertise on the site what do you think it might tell them about why it is good to advertise? b. List the kinds of things that would constitute fixed costs for About.com. List the kinds of things that would constitute variable costs. Remember: variable costs are items used in production or sale and not incurred when there is no production/sale. Fixed costs are everything else (even though accountants call some costs controllable). Describe the marginal cost of providing About.com to one additional person. Is it a lot or a little? (Hint: think about the basis on which the guides might be paid.) You WILL need to have read the links from the bottom of the page. c. Does About.com charge you for the information? Why or why not? How much would you be willing to pay for the information? Do you get some consumer surplus from using About.com? d. List the advertising you saw while visiting About.com. On what basis do you think About.com charges advertisers for their appearance on the site? e. About.com has an ethics policy. Why? What does it cover? f. How do you think About.com earns enough revenue to cover the fixed and variable costs? Do you think About.com makes a profit? Why or why not? Where do economies of scale figure into About.coms profitability? Diseconomies of scale come about when the enterprise gets too big. How much of a problem might that be for About.com? Show less
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