In Problem 16:

a. If Jeff and Julie pay $3,700 for snow removal equipment, will they make any money?

b. If Jeff and Julie reduce their prices to $30 for a driveway and $100 for a parking lot, they will increase demand to 55 for driveways and 32 for businesses. Will this affect their possible profit?

c. Alternatively, hiring additional people on a per-job basis will increase Jeff and Julie’s variable cost to $16 for a driveway and $53 for a parking lot, but it will lower the time it takes to clear a driveway to 40 minutes and a parking lot to 3 hours. Will this affect their profit?

d. If Jeff and Julie combine the two alternatives suggested in

(b) and (c), will this affect their profit?

 LO.1