Calvin Is a Custom Picture Framer

question 126

Multiple Choice

Calvin is a custom picture framer.His total fixed cost is $110 a day,and his average variable cost is $1 a frame.He is maximizing his profit by selling 22 picture frames a day for $6 a frame.Few people know about Calvin's Framery.Calvin thinks that if he spends $10 a day on advertising,he can increase his market and sell 44 picture frames a day for $6 a frame.If Calvin's belief about the effect of advertising is correct,he

• A)cannot increase his economic profit by advertising because advertising increases his average total cost.
• B)cannot increase his economic profit by advertising because advertising increases his total cost.
• C)can increase his economic profit by advertising.
• D)can increase his economic profit by advertising only if he raises the price of a picture frame.
• E)can increase his economic profit by advertising only if he can lower his total variable cost.

---

Definitions:

Psychological Withdrawal

A defense mechanism where an individual mentally disengages or detaches from stressful or emotional situations.

Feelings of Security

A sense of safety and freedom from worry or danger.

Comfort

A state of physical and emotional ease and freedom from pain or constraint.

Warmth

A quality or atmosphere of comfort, friendliness, and affection provided by or perceived in others.