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Jonathan is considering opening a shop for online baseball memorabilia. He has two options. He can build the web site himself and only pay for
Jonathan is considering opening a shop for online baseball memorabilia. He has two options. He can build the web site himself and only pay for hosting. This would cost him $2,000/y ear. The average item for sale is $4.01. Average costs associated with each sale are $2.99. His second option is to use an existing e-commerce service. This incurs an additional monthly cost of $15/month. The site takes a cut of his sales of $0.22/ item, so he is planning on also increasing his prices by $0.46/ item. The remaining costs stay the same. If Jonathan sells 200 items, which option does he prefer? a. He prefers to build the site himself at Q=200. b. He prefers to use the e-commerce site at Q=200. c. He is indifferent between the two options at Q=200. d. None of the other options
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