elegant dogs and dazzling dogs are competing canine grooming salons. each company currently serves 4,500 customers per year. both companies charge $35 to groom a dog. elegant dogs pays its dog groomers fixed salaries. salary expense totals $45,000 per year. dazzling dogs pays its groomers $10 per dog groomed. elegant dogs lures 2,000 customers from dazzling dogs. which of the following is true?

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10-12-2022
Business

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elegant dogs and dazzling dogs are competing canine grooming salons. each company currently serves 4,500 customers per year. both companies charge $35 to groom a dog. elegant dogs pays its dog groomers fixed salaries. salary expense totals $45,000 per year. dazzling dogs pays its groomers $10 per dog groomed. elegant dogs lures 2,000 customers from dazzling dogs. which of the following is true?

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jaiswaljyoti jaiswaljyoti · Answer 1 · 2022-12-19T07:02:07+01:00

Profits for Elegant Dogs will rise more than Dazzling Dogs will fall.

Elegant Dogs can boost its profitability by luring clients away from Dazzling Dogs, as was already demonstrated. Elegant Dogs has a fixed cost structure, so revenue grows while expenses stay the same. As a result, net income grows unbalanced. Contrarily, Dazzling Dogs' variable cost structure means that the drop in volume (caused by the loss of sales to Elegant Dogs) is accompanied by proportionate drops in net profitability.

Costs that are constant regardless of how many goods or services are produced. Salary, rent, and actual manufacturing facilities are some examples. Businesses with a high percentage of fixed costs include those in the manufacturing industry.

Learn more about fixed cost structure here brainly.com/question/28013521

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