To discuss: Whether Person X must establish the price greater or lesser than the competition.
Explanation of Solution
Given situation:
Person X and his roommates are planning to start a pet grooming service to assist himself through college. There are already 2 well-organized pet services in his district.
Setting-up the price greater or lesser than our competition is based on various factors, which includes the kind of services that is provided, the breadth of service, perceived value, and the experience that one gains. As Person X is a college student not with much experience in pet grooming, it may be wise to establish a price, which is lower than the competition.
As people look for deals and the college students can give value at a lesser price, the consumers must encourage the efforts that are made through college and must be ready to pay a cost little lesser than the competition however, it must be still enough to make a reasonable gain.
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