Chapter 14 Marketing Application Response Questions 1. You and your two roommates are starting a pet grooming service to help put yourselves through college. There are two other well-established pet services in your area. Should you set your price higher or lower than that of the competition? Justify your answer. 2. One roommate believes the most important objective in setting prices for your new pet grooming business is to generate a large profit while keeping an eye on your competitors' prices; the other roommate believes it is important to maximize sales and set prices according to what your customers expect to pay. Who is right and why? 3. Assume you have decided to buy an advertisement in the local newspaper to publicize your new pet grooming service. The cost of the ad is $1,000. You have decided to charge $40 for a dog grooming, and your variable costs are $20 for each dog. How many dogs do you have to groom to break even on the cost of the ad? What is your break-even point if you charge $60 per dog? 4. Bose will incur fixed costs of $150,000 and unit variable costs of $10 on its new wireless Bluetooth