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Question(s) / Instruction(s):

Alocal pet store, Roscoe’s Rascals, which has concentrated on selling puppies, is considering adding a line of pet food. A contractor estimates that it will cost $ 10,000 to convert some storage space into a retail area for the food. Roscoe’s Rascals will purchase the specialty food for $ 15 and sell it for $ 30. Marketing research indicates that the store will sell 900 bags. Should Roscoe’s Rascals add pet food to its products?

Assume that Roscoe’s Rascals decided to add the pet food line. Two months after it began selling the food, its pet food sales declined dramatically because a competitor across the street started selling the identical food for $ 22 per bag. Should Roscoe’s Rascals match the price offered by the competitor?

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