Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by:
A)accepting less dry-clean orders.
B)charging the highest price he can.
C)using less cleaning fluid.
D)lowering price.
E)charging a price that is equal to marginal cost.

Question

Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by:​
A)accepting less dry-clean orders.
B)charging the highest price he can.
C)using less cleaning fluid.
D)lowering price.
E)charging a price that is equal to marginal cost.

Quizplus · Accepted Answer

Lowering the price can increase demand, leading to higher sales volume and potentially greater profit, especially when costs decrease.

Gilligan Runs the Only Dry-Cleaning Business on a Desert Isle