DeShawn's Detailing Is a Service That Details Cars at the Customers

question 98

Multiple Choice

DeShawn's Detailing is a service that details cars at the customers' homes or places of work.DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service.For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional $20 to the total cost of the package.Should DeShawn continue to offer the engine detailing service?

• A)Yes, he still makes a profit by selling the engine detailing service with the basic detailing package.
• B)Yes, but only if he raises the price of the basic detailing package.
• C)No, his marginal benefit is less than his marginal cost.
• D)More information is needed for DeShawn to make this decision.

---

Definitions:

Rule 10b-5

A regulation under the U.S. Securities Exchange Act that prohibits fraud, misrepresentation, and deceit in the sale of securities.

1933 Act

Officially known as the Securities Act of 1933, it's a U.S. law enacted to ensure transparency in financial statements so investors can make informed decisions about securities.

1934 Act

The Securities Exchange Act of 1934, a U.S. federal law that regulates the secondary trading of securities (stocks, bonds, and debentures) in the United States, established to increase transparency and reduce fraud.

1934 Act

Refers to the Securities Exchange Act of 1934, which regulates the trading of securities such as stocks and bonds in the U.S. and established the Securities and Exchange Commission.