Abigail's Auto Art Is a Company That Applies Pinstripes to Vehicles

question 130

Multiple Choice

Abigail's Auto Art is a company that applies pinstripes to vehicles. Abigail's cost for a basic 1-colour pinstriping job is $40, and she charges $100 for this service. For a total price of $185, Abigail will apply a fancier 3-colour pinstripe application to an automobile, a service that adds an additional $50 to the total cost of the package. Should Abigail continue to offer the 3-colour pinstripe application?

• A)Yes, she still makes a profit by selling the 3-colour application.
• B)Yes, but only if she lowers the price of the 1-colour application.
• C)No, her marginal benefit is less than her marginal cost.
• D)More information is needed for Abigail to make this decision.

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