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

question 27

Multiple Choice

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service.For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package.Should Allison continue to offer the 3-color pinstripe application?

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

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