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Quick Change and Fast Change are competing oil change businesses. Both companies have 2 , 0 0 0 customers. The price of an oil change
Quick Change and Fast Change are competing oil change businesses. Both companies have customers. The price of an oil change at both companies is $ Quick Change pays its employees on a salary basis, and its salary expense is $ Fast Change pays its employees $ per customer served. Suppose Quick Change lures customers from Fast Change by lowering its price to $ per vehicle. Thus, Quick Change will have customers and Fast Change will have only customers.
Select the correct statement from the following.
Multiple Choice
Quick Change's profit will remain the same while Fast Change's profit will decrease.
Fast Change's profit will fall but it will still earn a higher profit than Quick Change.
Profits will decline for both Quick Change and Fast Change.
Quick Change's profit will increase while Fast Change's profit will fall.
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