Question

Jason, a high-school student, mows lawns for families in his neighborhood. the going rate is $12 for each lawn-mowing service. jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. if the market for lawn mowing services is perfectly competitive, what would happen if jason raised his price?

Answer 1

In a perfectly competitive market, if Jason raises his lawn-mowing service price to $20 from the going rate of $12, he is likely to lose customers as they can easily find other providers charging less for the same service.

If Jason, a high-school student, is working in a perfectly competitive market for lawn-mowing services and the going rate is $12, then if he tries to charge $20 for his services, he is likely to lose customers.

In a perfectly competitive market, there are numerous providers offering the same service, leaving no single provider with pricing power. Because customers can easily find other competitors providing a similar service at a lower price, they have no incentive to pay the extra cost, regardless of Jason's experience.

The law of supply also suggests that if Jason charges more than the going rate, the quantity of lawns he is hired to mow could significantly decrease.

Answer 2

For the answer to the question above, I believe the answer is If Jason raises his price he would lose all his customers.

Because a teenager could do that and he doesn't need an experience for lawn mowing and if you'll gonna increase your price. Be sure that you offer something additional or something special. A price hike in a competitive market is not good at all. Whether it's a big or a small business