Question

Direction: Read the following scenario and answer the questions that follow:
Mohan, Kishan, Manohar, and Kripa own a dry cleaning shop each in Skardi Plaza. They are the only dry cleaners in a township which is home to over 5,000 families. Each of them offered three services: Dry cleaning, Darning, and Alteration. One morning they met at a snack shop and verbally agreed to charge Rs. 200 for any of the three services on weekdays. On weekends and holidays, they agreed to increase the rate by Rs. 50.
The very next day after the four dry cleaners had met and agreed upon fixing the prices, Kripa, being the most skilled dry cleaner in the township, was thinking about setting his rates a bit higher than the one all the dry cleaners had agreed upon.
Which of the following options would let Kripa charge the rate he wants to, without violating the agreement in a major way?

• A. Kripa should announce the availability of a new and customised service available at Rs. 230
• B. Kripa should keep the same rate, i.e., Rs. 250 but open another smaller branch in the township.
• C. Since customers wanted faster service, Kripa should charge Rs. 230 for those wanting to get the job done earlier than others.
• D. By offering the next service as free, Kripa could charge Rs. 250 for the current service.
• E. Kripa should change the opening (two hours before others) and closing time (two hours before others) of the shop.

Answer 1

The Correct Option is A

The issue faced by Kripa is that he wants to charge more than his competitors as he is the most skilled without violating the agreement much. It is clear that he can’t charge more for the services all the dry cleaners had agreed upon. By opening earlier and closing later, he still won’t be able to raise his rates. So, we can reject option E.

Even if the customer wanted to pay more for a faster service, Kripa cannot increase the rate. So, we can eliminate option C. Same is the case with offering a free second service. So, option D is eliminated as well.

By opening another branch, he might increase his total revenue but still would not be able to raise the rates.

Only if he starts a new service (other than the three agreed upon), he can fix rates as per his choice. So, the correct option will be A.