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A managed app published in AppExchange by Vendor A. Customer A installs this managed package in his Salesforce org. When customer A excutes this managed app in his org,

Will the Vendor A be charged for the CPU time when his managed package code is executed or will it incurred by Customer A's Salesforce org Governor limits?

Will this package be executed in Customer A's Salesforce org or will it use Vendor A's compute resources?

Will there be a monetary implications for Vendor A when Customer A is executing this managed package app?

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Governor limits are a "resource protection" mechanism, not a "metering" system. The are intended to keep the system running smooth for the many tenants that share the same hardware ("multi-tenant design"). The governor limits for CPU time do not distinguish between code in a managed package and code that is not. The limit is cumulative for all code running in a transaction. Customers are not specifically charged for how much CPU time is used, nor are ISVs charged for resources they consume in a subscriber's org. The only fees an ISV owes Salesforce is any annual fees (e.g. Security Review fees) and a percentage of the license fees they collect from their subscribers, if any.

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When an application is installed in an org, it consumes limits in that org. It does not consume any limits in the vendor's org unless some sort of callout is set up between the two environments. Salesforce does not charge vendors for people installing and using their packages.

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