Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is $2 a plant. Few people know about Calvin's Orchids and he is maximizing his profit by selling 18 orchids a day for $7 a plant. Calvin thinks that if he spends $20 a day on advertising, he can increase his market and sell 48 orchids a day for $7 a plant. If Calvin advertises will his average total cost increase or decrease at the quantity produced? If Calvin advertises and as a result he sells 48 orchids a day for $7 a plant, his O A. average total cost decreases if total cost decreases, and increases if total cost increases O B. average total cost does not change at the quantity produced OC. average total cost increases at the quantity produced O D. average total cost decreases at the quantity produced

Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is $2 a plant. Few people know about Calvin's Orchids and he is maximizing his profit by selling 18 orchids a day for $7 a plant. Calvin thinks that if he spends $20 a day on advertising, he can increase his market and sell 48 orchids a day for $7 a plant. If Calvin advertises will his average total cost increase or decrease at the quantity produced? If Calvin advertises and as a result he sells 48 orchids a day for $7 a plant, his O A. average total cost decreases if total cost decreases, and increases if total cost increases O B. average total cost does not change at the quantity produced OC. average total cost increases at the quantity produced O D. average total cost decreases at the quantity produced

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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