Author Question: Selma makes the best soaps. Her total fixed cost is $10 per day and her average variable cost is ... (Read 329 times)

mmmmm · **on:** Nov 23, 2022

Question 1

The Role of Advertising

Consider a gym that earns a profit of $25.75 per member. An advertisement that costs $360.50 would increase membership by 10. To make the advertisement worthwhile, how many of the new members must persuade just one other person to join the gym?
◦ 4
◦ 6
◦ 5
◦ 3

Question 2

Selma makes the best soaps. Her total fixed cost is $10 per day and her average variable cost is $1.50 per bar. When she first starts her company, very few people know about her soaps and she maximizes her profit by selling 24 bars at $9 a bar. Selma thinks that if she spends $120 a day on advertising, she will sell 102 bars at $9 a bar.
If advertising does help her sell 102 bars, her economic profit ________ (increases/decreases) by ________.
Please round your answer to two decimal places.
◦ increases, $582.00
◦ increases, $465.00
◦ decreases, $582.00
◦ decreases, $465.00

sakura282000 · **Reply #1 on:** Nov 23, 2022

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