Roger's World of Pets is considering adding cat grooming to the array of goods and services he currently provides. He estimates that consumers would be willing to pay $25 per cat for a 1 hr. cat grooming appointment. He also estimates that he would need 2 workers per cat (1 to hold the cat down and the other to groom the cat). Wages in this labor market are $15/hr. Using marginal analysis, Roger should: ο οιο introduce cat grooming. do not offer cat grooming be on the fence ("indifferent") about introducing cat grooming. be unable to tell whether cat grooming is a good idea because we don't know how much he pays in rent for his shop.

Roger's World of Pets is considering adding cat grooming to the array of goods and services he currently provides. He estimates that consumers would be willing to pay $25 per cat for a 1 hr. cat grooming appointment. He also estimates that he would need 2 workers per cat (1 to hold the cat down and the other to groom the cat). Wages in this labor market are $15/hr. Using marginal analysis, Roger should: ο οιο introduce cat grooming. do not offer cat grooming be on the fence ("indifferent") about introducing cat grooming. be unable to tell whether cat grooming is a good idea because we don't know how much he pays in rent for his shop.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter5: Supply, Demand, And Price: Applications

Section: Chapter Questions

Problem 11QP

See similar textbooks

Related questions

Q: You are considering renting a city apartment with 1,000 square feet for $1,400 per month. The…

A: Marginal cost is defined as the additional cost incurred on additional unit of purchase. Here 1000…

Q: describe how the firms sets an efficiency wage above the competitive level. Why are there no market…

A: The market for labour comprises the demand and supply of labour. The labour market will be in…

Q: Max's Marginal Benefit from the Qth hour he spends skiing, expressed in dollars, is given by…

A: The extra satisfaction, usefulness, or worth that a person receives by using one extra unit of an…

Q: In the following individual labor supply curve, at which wage is the substitution effect the…

A: The quantity of labour supplied at each wage rate is plotted on the labour supply curve. People…

Q: a labor supply decision. He has 12 available hours and must choose for how many to work for pay.…

A: People do not derive usefulness just from the goods they buy. Leisure time is also beneficial to…

Q: Acme Inc. supplies rocket ships to the retail market and hires workers to assemble the components. A…

A: The price of a rocket ship in the retail market is $30,000.The cost of rocket ship components is…

Q: 3a and 3b

A: It is given that person J and person K can live together by paying $500 which means that they have…

Q: (Assume that this is a competitive market.) Arnold gets utility from consumption (C) and leisure…

A: "Since you have asked multiple parts, we will answer only the first part for you. If you have any…

Q: just subparts a, b and c please

A: To solve this problem, we need to understand the concept of utility maximization and the budget…

Q: Analyze and graph the Product Effect and the Substitution Effect in labor demand in the face of an…

A: Labor demand is determined by the demand for the products and services that labor creates. When…

Q: Sharon spends her time (16h) between leisure (L) and work and he consume Y product from his working…

A: A firm’s willingness to pay for each unit of labor it wishes to hire is shown by the labor demand…

Q: The equilibrium wage rate in an industry is determined by a) whether workers or management are…

A: d) the intersection of the market demand curve for labor and the market supply curve for labor.

Q: Twentyfirst Century Electronics has discovered a theft problem at its warehouse and has decided to…

A: Disclaimer- “Since you have asked multiple question, we will solve the first three question for you…

Question

Roger's World of Pets is considering adding cat grooming to the array of goods and services he
currently provides. He estimates that consumers would be willing to pay $25 per cat for a 1 hr. cat
grooming appointment. He also estimates that he would need 2 workers per cat (1 to hold the cat
down and the other to groom the cat). Wages in this labor market are $15/hr. Using marginal
analysis, Roger should:
introduce cat grooming.
do not offer cat grooming
be on the fence ("indifferent") about introducing cat grooming.
be unable to tell whether cat grooming is a good idea because we don't know how much he pays in rent for
his shop.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Bluth’s Bananas is considering expanding its retail operations for its one-of-a-kind frozen banana stands on Jones Beach, which is 10 kilometers long. Bluth’s Bananas estimates that the typical day has 2,000 visitors to the beach, spread uniformly, and that each will demand a single frozen banana provided the price plus any disutility of traveling to a stand does not exceed $6. To visit a stand a beach goer incurs a disutility of $0.50 for each 1/4 kilometer they have to walk to reach a stand. Each Bluth Banana costs $0.75 to make and each stand requires an operating fee to be paid to the city of $50 per day. Determine the equilibrium number of stands Bluth’s Bananas should operate on the beach given it is not in competition with any other firm. Determine the profit maximizing price for the bananas and calculate the profit realized by BB in equilibrium.
Eileen is awake for 100 hours per week. Use the green line (triangle symbol) to draw Eileen's budget constraint if she earns $12 per hour. Then use the blue line (circle symbol) to draw her budget constraint if she earns $16 per hour. Finally, use the purple line (diamond symbol) to draw her budget constraint if she earns $20 per hour. 2000 1800 Wage of $12 per hour 1800 1400 1200 Wage of $16 per hour 1000 800 Wage of $20 per hour 600 400 200 10 20 30 40 50 60 70 80 90 100 Leisure (Hours) Consumption (Dollars)
Harry owns a barbershop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. Harry should Multiple Choice not hire the second barber, because she will diminish profits hire the second barber because she will add $108 to profits hire the second barber because she will add $28 to profits. not hire the second barber, because she is less productive than the first barber
You were promoted as the manager of a new Clean-Well Sanitary Store that sell cleaning andsanitation products wholesale. You recently read in an article that there the price of vitamins isexpected to increase by 20 percent. How will this affect your store’s sales of sanitationproducts?
Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $102 for the suit: Store Local Department Store Across Town Neighboring City Store Local Department store Juanita makes $42 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $42 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. (Just enter the whole dollar number, no units and no cents) Across Town Travel Time Each Way (Minutes) 15 30 60 Neighboring city Price of a Suit (Dollars per suit) 102 Opportunity cost of time…
G.309.
Ana decides every day how many hours to work and how much beef to consume. She spends all income earned from work each day on consumption of beef. Her utility function for free time (t, 24 hours minus hours worked) and consumption (y) is: U(t,y)=2t^1/2 + y The price per unit of beef consumed is 4 and her hourly wage is 1. Using a diagram and appropriate algebra, explain what Ana’s optimal number of hours work and units of beef consumed are each day. Ana reads a book about the impact of beef consumption on climate change and realises that there is a cost to society of her beef consumption. She takes account of this impact on society in her own decisions, incorporating a disutility of -0.03y per unit of beef consumed. She still only consumes beef and spends all income earned each day on this consumption. Explain, using a diagram and appropriate algebra, how recognition of the impact of her consumption choice on climate change impacts on Ana’s daily free time and beef…
Dean likes to practice guitar in his apartment, working primarily on mastering old Velvet Underground songs. Because he’s sure that developing guitar prowess will lead to riches – or at least critical acclaim in indie circles – he derives $500 in surplus from being able to practice. Dean’s practicing, however, is quite loud and can be heard clearly through paper-thin walls in his hip Brooklyn apartment. Britta lives next door and likes to read, but she is unable to do so when Dean plays guitar. She gets $350 in surplus from the satisfaction of reading. Suppose that when Dean and Britta bargain, they always split any surplus to be divided evenly. Assume that it’s common knowledge that courts always overestimate damages by $200, and transaction costs are $50. Given these assumptions, which of the following legal rules is most efficient: Assuming the same information from Question 28 above, what would be the most efficient tax to levy on Dean’s playing? A. $200 B.…
e. If the payment for each exterminated mouse is P=$4, find the wage rate W* that creates 16. In this labor market, there is one worker (Arnold) and one firm (Ex-Terminator Pest Co). (Assume that this is a competitive market.) Arnold gets utility from consumption (C) and leisure (L), according to U(C, L) = In C + In L. His budget constraint is C = WH + Y, where H is the number of hours he works in the week and W is his hourly wage rate. There are 100 total ours in the week, which Arnold can spend working or pursuing leisure activities. His unearned income, Y, is $50. Note that dULac %3D %3D a. What is the optimality condition (just the formula) for Arnold's utility maximization problem? b. Using Arnold's utility function, solve for his optimal labor supply, H*. Ex-Terminator Pest Co. produces dead mice as its output. If they hire an individual to work for E hours and use K mousetraps, then the number of exterminated mice they produce is Q = F(E, K) = 150 In E + 10 In K. An employee is…
Compare and contrast Jevon’s and Gossen’s view of the equimarginal rule for maximizing consumer utility. Which approach best captures the current state of knowledge in microeconomic theory? Why?
Using the utility function and wage constraint in the problem, please complete the utility maximization problem using the substituion and Lagrangian method. If you can not do both, I would prefer the substitution method.
Pam is a paper salesperson and also an excellent typist. She can type 120 words per minute, but can rack up $80 per hour in sales. Erin would like some typing work but can only type 30 words per minute. Economic efficiency suggests O Pam should always do the typing because she can type faster. Erin should do the typing, provided she is willing to do so for less than $40 per hour. O Erin should do the typing, provided she is paid more than $40 per hour. O Erin should do the typing, provided she is willing to do so for less than $20 per hour.