Curt makes specialty pizzas. His total fixed cost is $44 a day, and his average variable cost is $2 a pizza. Few people know about Curt's Pizzas and he is maximizing his profit by selling 22 pizzas a day for $4 a pizza. Curt thinks that if he spends $200 a day on advertising, he can increase his market and sell 35 pizzas a day for $4 a pizza. If Curt does not advertise, his economic profitloss = $ If Curt decides to advertise, he expects his economic profitloss to be $. Is it worthwhile for Curt to advertise (if his expectations are correct)? OA No OB. Yes

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Curt makes specialty pizzas. His total fixed cost is $44 a day, and his average variable cost is $2 a pizza.
Few people know about Curt's Pizzas and he is maximizing his profit by selling 22 pizzas a day for $4 a pizza.
Curt thinks that if he spends $200 a day on advertising, he can increase his market and sell 35 pizzas a day for $4 a pizza.
If Curt does not advertise, his economic profit/loss = $|
If Curt decides to advertise, he expects his economic profitloss to be $
Is it worthwhile for Curt to advertise (if his expectations are correct)?
O A. No
O B. Yes
Transcribed Image Text:Curt makes specialty pizzas. His total fixed cost is $44 a day, and his average variable cost is $2 a pizza. Few people know about Curt's Pizzas and he is maximizing his profit by selling 22 pizzas a day for $4 a pizza. Curt thinks that if he spends $200 a day on advertising, he can increase his market and sell 35 pizzas a day for $4 a pizza. If Curt does not advertise, his economic profit/loss = $| If Curt decides to advertise, he expects his economic profitloss to be $ Is it worthwhile for Curt to advertise (if his expectations are correct)? O A. No O B. Yes
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