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21 September, 05:05

Stephen runs a pet salon. He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he will add $65.65 to his costs and $65.65 to his revenues. What will be the effect on his profits of grooming 121 dogs instead of 120 dogs? Stephen's profits will change by $ (Enter your response rounded to two decimal places.)

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  1. 21 September, 06:53
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    Effect on income = $0

    Explanation:

    Giving the following information:

    He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he will add $65.65 to his costs and $65.65 to his revenues.

    Contribution margin per dog = selling price - unitary variable cost

    Contribution margin per dog = 65.65 - 65.65 = 0

    Effect on income = 0*1 = $0
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