Hi: I am inserting the contents of our miraheze account so that another student can use it:
“Amazon Takes Aim at UPS at FedEx”
Amazon, a roughly twenty- year old company, has started some aggressive expansion especially in the last few years. Along with this expansion has come rising costs, especially on the shipping end of the business which affects the profit, total cost, variable cost, revenues, adds competition, and could affect the opportunity cost of their business. A variable cost is a cost that is subject to change with relevant frequency and an example of this would be shipping. The more times a package gets handled the greater the cost, which in turn increases the total cost. Total cost are all the different costs that a company incurs to operate. This in turn affects the overall profit of the company. Profit is equal to the total revenue minus the total cost. The more money you have to spend on getting your product to its destination, the less profit you will make, unless you pass that extra cost onto your customers.
Amazon is currently in the process of starting their own shipping business which will cut out the “middle men”, like UPS, USPS, and FedEx, thus allowing Amazon to ship their products cheaper and helping them to maximize their profits. Maximizing profit is what being in business is all about, it is estimated that Amazon could save “$ 1.1 billion” each year by cutting out the other carriers.
In pursuing this new idea, Amazon is weighing their options for opportunity costs. Opportunity costs are simply listing all possible choices for what you could do in a given situation and then picking one over the other to maximize profit and minimize potential loss. By choosing to enter into the shipping business, Amazon is making the best use of their time and money and while creating their own shipping division may have its own downfalls, in the process of determining their opportunity cost, it will maximize their profits.
“Honda to Lift Output of Top – Selling SUVs”
Class Time: 10: a.m. Date October 16, 2016
Honda Motor Company is retooling to ramp up production of the increase in demand for Sport Utility Vehicles (SUVs), pickups, and the Civic. Honda is trying to better satisfy this niche by building vehicles that will help them in the competitive market which, in the automobile industry is an example of monopolistic competition, and for the consumer is part of the consumption decision. Demand for the larger vehicles is up because of the drop in gas prices, but the demand for more fuel efficient vehicles is up as well. Demand is simply how much of a particular product, in this case SUVs, pickups, and the Civic, that a group of people want. Demand is influenced by what each person wants. Honda is working hard to meet the wants of consumers by building bigger and more fuel efficient vehicles. Honda is on the monopolistic side of competition. Monopolistic competition is a type of imperfect competition in which one believes that what they do will not change what their competitors will do. Therefore, what Honda does, for example, making small changes such as redesigning the size and increasing the fuel efficiency, will probably not have a large impact on other car manufacturers because of the limited amount of competition. The consumption decision is a major choice for people. It involves a person’s income, what they like, and how much they are willing to spend. In the case of Honda, the consumers are wanting more of their SUVs, pickups, and the Civic, which Honda is willing to adapt to by making vehicles larger in size and more fuel efficient.