Prices are rising. More and more people are losing their jobs. Queus at shops which were once really long, are now much shorter. Admist this current recession, just how on earth is it ever possible to reduce costs?
As a consumer, here is one way to reduce costs: where the distance is small and the place you need to go to is near by, walk instead of driving. Some of us just LOVE to drive out to even the places which are closest to our homes, when its within walking distance. But why on earth do that and spend money on things like petrol bills when you drive? Why not exercise a little, get some fresh air and just walk? Because it sure saves a lot of money!
A SUBSTITUTE is a good or service that replaces another good or service for a particular same purpose. In this case, walking is a substitute for driving.
By walking, you get good exercise and you don't have to pay any money at all to walk to a certain place or venue. But by driving there are things that you need for pay for, for instance, petrol bills at the petrol stations you go to whenever your car runs out of petrol which might make it impossible to drive.
So if the distance is near, why not give some of your energy and time to walk rather than driving? In fact sometimes driving could possibly slow you down as well since its possibly to get caught in traffic jams.
I live about 5 mins away from my primary school (Henry Park Primary School). As a kid i would walk to school relatively a lot, compared to how many rides my parents would give me. I had a neighbour living opposite me that went to HPPS too and sometimes, i would walk to school with her too. HPPS is so near that its worth walking, rather than having my parents fetch me there every day and their petrol being used up at a faster rate, resulting in more petrol bills to be paid.
As producers, a tip to reduce costs is to negotiate for a lower rent of the building.
Rent is a fixed cost- a cost of production that does not vary with output at all. It is a cost you must pay for even if more workers are employed, even if more people leave the company etc. Bascially, it is a cost you must be accountable for no matter what happens.
If rent is high, you going to have to pay that same amount of high rent throughout, despite whatever circumstances that may come your way! It would increase your costs, as you have to pay a high cost for say, the rent of the building.
However, if rent decreases by say 20%, it means it is lowered by 20%. Now, you still have to pay rent, but you are paying less rent since rent decreases by 20%, and that would definitely help producers to reduce costs!
sources:
1. small interview with my dad (for the producers tip)
2. economics textbook (current one and GCSE ones)
3. consumers tips: http://freesamplesdirect.com/blog/top-50-tips-to-reduce-costs-in-tough-economic-times/
:D
Alisa
:D
Rent can take up a huge part of total cost - I am very amazed at recent reports on artists who have to move out because the rent on their studio double or even triple! Unfortunately, how much you can lower rent depends on your bargaining power with the landlords - and usually, guess who has the upper hand?
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