Final answer:
Oliver can increase his revenue by adjusting production, setting competitive prices, managing his workforce appropriately, and offering unique products or features that differentiate his guitars from the competition.
Step-by-step explanation:
Oliver makes guitars, and to increase his total revenue amidst competition from four other guitar shops on the same street, he could consider various strategies. A few options include:
- Expanding or reducing production: Depending on demand, Oliver could either make more guitars if there is a market for them, or reduce production if the market is saturated to avoid excess inventory.
- Setting the price that is competitive yet profitable, considering the quality and brand positioning of his guitars compared to his competitors.
- Hiring workers to increase production capacity if demand is high, or to lay off workers to reduce costs if necessary.
- Starting to sell new guitar models or accessories that his competition does not offer, or stop selling guitars that are not profitable.
Additionally, Oliver might consider differentiating his product through quality, design, customer service, or by offering unique features that his competitors do not have. This could give him a competitive edge and could potentially draw more customers to his shop.