Carol owns a dry cleaning business with no other competition in town. She hires you as a consultant

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Carol owns a dry cleaning business with no other competition in town. She hires you as a consultant to ask how she can raise revenues. You tell her to increase the price of dry cleaning a suit from $4 to $5 and decrease the price of cleaning a sweater from $3 to $2.

a. Why did you give Carol this recommendation?

b. Would you offer the same recommendations if Carol asked you to help increase profits instead of revenues?

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