Question

How is the cost to companies and entrepreneurs using analytics calculated? group of answer choices

O free for everyone
O free for individuals;
O corporate rates based on usage
O a few cents per 100 hits
O correlation to conversion rates of website flat fee

Answer 1

The cost calculation for analytics varies widely among companies and depends on the business's cost structure, including fixed and variable costs. High fixed-cost businesses may experience relatively flat costs post-setup, whereas companies with low fixed costs could see costs rise sharply with increased output. The specifics of usage and operational scale play crucial roles in determining the analytics costs for a company.

Step-by-step explanation:

The cost to companies and entrepreneurs using analytics is not a one-size-fits-all scenario. It greatly depends on the pattern of costs associated with the particular business model and the industry in which the company operates. For example, companies with high fixed costs but low marginal costs, such as an internet company providing medical advice, will have the total cost curve start at a high level due to setup and maintenance costs like leasing computer space and creating content. Yet, once operational, their costs may remain relatively flat with increased output due to low variable costs. By contrast, businesses such as those offering seasonal services like leaf raking might have low fixed costs concerning transportation and tools, but they could experience sharp increases in marginal costs if they were to ramp up services significantly.

In the situation where a business becomes very popular and sees a large rise in demand, such as a significant increase in website traffic, they could face a scenario where the costs will increase as they need to purchase additional computer space to handle the traffic. Conversely, firms with low fixed costs and high variable costs, like certain manufacturing operations, can see marginal costs skyrocket if they overextend their operations without sufficient downtime for maintenance. Hence, the cost calculation for analytics must consider usage patterns, scale of operations, and the specific cost structure of the business.

Answer 2

The cost to companies for using analytics is often based on corporate rates calculated by usage, encompassing a variety of cost patterns, including high fixed costs for online businesses and low fixed costs for service businesses like yard maintenance.

Step-by-step explanation:

The cost to companies and entrepreneurs using analytics can be calculated based on different factors and varies across industries. It's essential to consider various cost patterns when evaluating these costs. Some firms, especially those operating online, might have high fixed costs initially, such as setting up a website, content development, and computer space leasing. Once the setup is complete, however, they can operate with low marginal costs, such as routine monitoring and updates. As traffic increases, additional costs for computer space might occur due to the surge in viewership.

Other companies may have lower fixed costs, involving basic equipment like rakes and shovels for yard maintenance or a vehicle for transportation. Here, costs increase primarily through direct labor rather than fixed assets. Some businesses experience sharp increases in marginal costs, particularly when capital equipment is overused without maintenance, leading to increased expenditure on repairs and replacement.

When it comes to analytics services, these are not universally free. The cost can be determined by several pricing structures, including but not limited to free access for individuals, corporate subscription rates based on usage, charges per specific number of hits (often in the advertising realm), or a correlation to conversion rates of the website. Additionally, some analytics services might charge a flat fee. The correct option for how the cost is calculated for analytics usage by companies and entrepreneurs is corporate rates based on usage.