If the average acquisition cost of a highly satisfied user is $1080, average revenue is $600/year with a ucm of 60%, how many years would starbucks have to keep such a customer running at the average revenue spend to break-even on the acquisition cost?

Break even point will be 3 years

Explanation:

We have given acquisition cost = $1080

Average revenue = $600

And UCM, that is margin is 60 % of revenue

So margin

We have to find the break even point on the acquisition cost

Break even point is given by

So break even point will be 3 years

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answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.