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Business, 19.05.2020 22:05 lindamillscotton90

Suppose you run a lawn-care service. With your service, you have individual contracts with multiple homeowners to come mow and edge their lawns every two weeks. You offer this mowing and edging service for the rate of $100 per hour. Assume that the cost of providing this service works out to $50 per hour for you (and your team of workers), and that each month you and your team have 25 hours of service contracted (about 6 hours per day). You would like to increase the amount of profit you currently have each month, even if it means working more hours. Unfortunately, in the area in which you provide your service there is no opportunity to acquire any more mowing and edging contracts. There is, however, an unfulfilled need for a high-quality pruning service at a reasonable price. You and your team can do quality pruning. Based on your marketing research efforts, you estimate that there is a demand for 10 hours per month of pruning if you charge $90 per hour for it. Assume that 5 of those 10 pruning hours would come from (that is, would decrease) your mowing and edging contracts; the other 5 pruning hours would come from your competitors (because your price is more attractive). Does it economically make sense for you to begin to offer a pruning service in addition to your mowing and edging service

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