Use the Information Below to Answer the Following Questions

question 54

Multiple Choice

Use the information below to answer the following questions.
Fact 14.3.2
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.14.3.2. 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 ________. If price falls, markup ________. If price rises, markup ________.

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

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Definitions:

Prefrontal Cortex

The region of the brain located at the front of the frontal lobes, responsible for complex cognitive behavior, decision making, and moderating social behavior.

Hypothalamus

A small region of the brain, located below the thalamus, crucial for hormone production, and regulation of bodily functions such as temperature, hunger, and sleep.

Psychopathic Abuser

An individual who exhibits characteristics of psychopathy, such as a lack of empathy, and engages in abusive behavior towards others.

Undercontrolled

Describes a lack of self-regulation or the inability to manage one’s impulses, emotions, or behaviors effectively.