Expenditures on Advertising

question 210

Multiple Choice

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.

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