Question

Explain how cost-sharing arrangements affect people’s consumption decisions about consumption and what, in general, this has to do with environmental problems.

Answer 1

Cost sharing is a process wherein inedivudals or organisations work together to secure savings in one or more areas of their own activiteies or business operations. These partnerships help to realize other advantages in business like increased marketplace exposure, access to technology, etc.—but cost savings is oftent the central component of these arrangements. This can also help in aving resources and use of resources optimally by the parties involved. From personal life to business ( in the forms of marketing to transportation to research and development) cost sharing can be highly benefitting. It is a useful tool for parties with limited resources and other constraints.

In the world of eocnomics, relatively few cost-sharing arrangements have been implemented with respect to manufacture of goods or execution of services. At present, majority of cost-sharing plans are in the area of marketing and advertising.

Some of the main advantages of this strategy in addressing environmental problems are that :-

• They enable marketers to address the competitive challenges of the rising cost of direct marketing essentials, such as postage and paper. This helps in better allocation of resources and as a result there is better use of raw materials which directly help in reducing the stress on natural regenrating resources.
• They help in reducing issues like pollution. For example an individual travelling alone in a car will create an unfavourable carbon footprint compared to a pool of individuals sharing a common source of transport.
• This also helps in advancement of technoological resources as more individuals are involved in the development of newer products. This naturally helps in better and more efficient products which again have favourable impact for the environment.

Read more: https://www.referenceforbusiness.com/small/Co-Di/Cost-Sharing.html#ixzz6ZswbK2tR