A service provider has decided to charge his customers P5,000 for every upholstery cleaning service. The customer thinks that it is a steal, since the service provider is doing a great job and thinks that it could have costed them at least P7,000 had they agreed to the first service provider that they went to. The total cost to the provider is P2,000 which include the cleaning materials and labor. Identify the ceiling price and floor price of the service. Should the service provider decide to increase his price to P6,500, do you think it is still acceptable to the customer? Why?
A service provider has decided to charge his customers P5,000 for every upholstery cleaning service. The customer thinks that it is a steal, since the service provider is doing a great job and thinks that it could have costed them at least P7,000 had they agreed to the first service provider that they went to. The total cost to the provider is P2,000 which include the cleaning materials and labor. Identify the ceiling price and floor price of the service. Should the service provider decide to increase his price to P6,500, do you think it is still acceptable to the customer? Why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A service provider has decided to charge his customers P5,000 for every upholstery cleaning service. The customer thinks that it is a steal, since the service provider is doing a great job and thinks that it could have costed them at least P7,000 had they agreed to the first service provider that they went to. The total cost to the provider is P2,000 which include the cleaning materials and labor. Identify the ceiling
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