Data Concerning Kardas Corporation's Single Product Appear Below: the Company

question 68

Multiple Choice

Data concerning Kardas Corporation's single product appear below: The company is currently selling 8,000 units per month. Fixed expenses are $719,000 per month. The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

• A) decrease of $160
• B) increase of $20,160
• C) decrease of $20,000
• D) increase of $160

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Definitions:

Rational Choice Theory

An economic principle that states individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.

Macro Level

Analysis or perspectives focused on large-scale structures and processes in society, often contrasting with micro-level individual or small group interactions.

Maximize Interests

The process of optimally increasing the benefits or gains from a situation or decision.

Maintain Associations

The ongoing effort to keep relationships or connections between entities or concepts active and beneficial.