Reference no: EM132460272

Problem 1. In March 2016, Robin invested in a new and improved play spaces for dogs. Dogma replaced compacted sand (which would get in dogs' fur and then into customers' cars) with a durable rubber surface that can stand up to the toughest Great Dane. This investment increased Dogma's monthly fixed cost to $2,200, due to a loan that must be repaid. Canine Cabana made no improvements to its facilities around this time. During April 2016, Robin charged a price of $35 for one week of daycare. On average during April, Robin attracted 145 customers per week. In May, Robin cut her price to $30 as part of a "Hooray for May" promotion. During May, Dogma attracted 200 customers on average per week. What recommendation would you offer to Robin for pricing for the remainder of 2016?

Problem 2. In March 2017, a group of local cat owners, feeling discriminated-against by Dogma's "dogs-only" policy, began posting derogatory messages on the Dogma Facebook page. Robin-who knows not to take things personally when there is a good business opportunity to be had- immediately re-purposed a storage room as a cat play area, complete with giant climbing struc- tures, fake birds and mice, twelve cameras to capture cat videos, and the first fully automated litterbox in the state of Georgia. Robin's calculations show that the marginal cost of providing daycare to one cat for one week is $14-same as the dog marginal cost. Should Robin charge