Use the Information Below to Answer the Following Questions

question 81

Multiple Choice

Use the information below to answer the following questions.
Fact 13.3.2
Suppose that Tommy Hilfiger's marginal cost of a jacket is $100 (a constant marginal cost) and at one of the firm's shops,total fixed cost is $2,000 a day.The profit-maximizing number of jackets sold in this shop is 20 a day.Then the shops nearby start to advertise their jackets.The Tommy Hilfiger shop now spends $2,000 a day advertising its jackets,and its profit-maximizing number of jackets sold jumps to 50 a day.
-Refer to Fact.13.3.2.If advertising decreases demand and makes demand more elastic,the price of a Tommy Hilfiger jacket ________.If advertising increases demand and makes demand less elastic,the price of a Tommy Hilfiger jacket ________.

• A)falls;does not change
• B)rises;falls
• C)falls;rises
• D)rises;does not change
• E)does not change;does not change

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Definitions:

Progesterone

A steroid hormone released by the corpus luteum that stimulates the uterus to prepare for pregnancy.

Estrogen

A group of steroid hormones that promote the development and maintenance of female characteristics of the body.

Feedback Loops

Mechanisms that use the outcomes of processes to regulate and control the processes themselves, often maintaining stability in systems.

Female Hormones

Chemical substances, such as estrogen and progesterone, produced mainly by the ovaries that regulate female reproductive functions and secondary sex characteristics.