Assume that you are considering a 7-night vacation to Fort Walton Beach, Florida, in March. You estimate the total cost of the trip to Fort Walton Beach at $1,250, including discounted airfare. However, a resort at Myrtle Beach, South Carolina, is offering 3 free nights with a 7-night stay. The advertised value of this special 3-night free offer is $397. In addition, you must use a $200 flight coupon that you received from an airline last December to compensate you for a 6-hour flight delay. After applying the $200 flight coupon and the $397 for the 3 free nights, the total out-of-pocket cost for the trip to Myrtle Beach is $1,100.
150-word paper which addresses the following:
Based on the total explicit and implicit costs, should you take the trip to Fort Walton Beach or to Myrtle Beach? Explain your answer and support it with total cost estimates (explicit plus implicit) for each trip option.
How can we help you with this? The information you need seems to be in the case study.
To analyze the total costs and make a decision between the trip to Fort Walton Beach and Myrtle Beach, we need to consider both explicit and implicit costs for each option.
Explicit costs are the actual out-of-pocket expenses incurred during the trip, while implicit costs are the opportunity costs associated with the decision. Opportunity cost refers to the value of the next-best alternative foregone.
For the trip to Fort Walton Beach, the explicit costs are estimated at $1,250, including discounted airfare. However, there are no additional implicit costs mentioned in the scenario.
On the other hand, the trip to Myrtle Beach offers 3 free nights worth $397, which reduces the out-of-pocket cost to $1,100 after applying the $200 flight coupon received for a flight delay. Here, the implicit cost is the value associated with the 3 free nights, which is $397.
To calculate the total cost for each trip, we need to consider both explicit and implicit costs.
For Fort Walton Beach: Total Cost = Explicit Cost
= $1,250
For Myrtle Beach: Total Cost = Explicit Cost + Implicit Cost
= $1,100 + $397
= $1,497
Comparing the total costs, the trip to Fort Walton Beach has a total cost of $1,250, while the trip to Myrtle Beach has a total cost of $1,497. Therefore, based on the total explicit and implicit costs, it is more cost-effective to choose the trip to Fort Walton Beach.
It is essential to note that this analysis only considers the financial aspect. Other factors such as personal preferences, attractions, and activities at each destination should also be considered before making a final decision.