DeShawn's Detailing Is a Service That Details Cars at the Customers

question 98

Multiple Choice

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.Should DeShawn continue to offer the engine detailing service?

• A)Yes, he still makes a profit by selling the engine detailing service with the basic detailing package.
• B)Yes, but only if he raises the price of the basic detailing package.
• C)No, his marginal benefit is less than his marginal cost.
• D)More information is needed for DeShawn to make this decision.

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Definitions:

Price Customers

Refers to consumers whose purchasing decisions are primarily influenced by the price of goods or services.

Operate As Cartel

Operate as cartel means when independent businesses collectively agree to control production, market, and prices of a product to monopolize a market.

Industry's Price

The prevailing price level for goods or services within a specific industry, influenced by factors such as supply and demand.

Output

The total amount of goods or services produced by a firm or country within a specific time period.