Expenditures on advertising ________
A) can lower average total cost if the advertising increases the quantity sold by a large enough amount
B) cannot lower average total cost because when a firm advertises it increases its costs
C) always lower average total cost because whenever a firm advertises, it increases the quantity sold
D) are variable costs so do not affect the average total cost
A
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In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of a rise in the nominal interest rate?
A) The demand for money curve would shift rightward to MD2. B) The demand for money curve would shift leftward to MD0. C) There would be a movement upward along the demand for money curve MD1. D) There would be a movement downward along the demand for money curve MD1.
In the 1980s the CEO of Coca Cola corporation found out that its core business was making roughly 15% rate of return on investor capital
However, he also discovered that some of the newly acquired subsidiaries were not making anywhere near that amount. He decided to ask each of these companies to come up with a plan to push the rate of return closer to the 15% mark or he warned that these companies might be sold. Why would the CEO sell off companies or operations that are still profitable?