Use the Information Below to Answer the Following Question

question 84

Multiple Choice

Use the information below to answer the following question.
Fact 14.3.1
Suppose that at one of the Talbots shops, marginal cost of a coat is constant at $150, and total fixed cost is $3,000 a day. The shop maximizes its profit by selling 15 coats a day at $500 per coat. Then the shops nearby increase their advertising. The Talbots shop responds by spending $1,500 a day more on advertising its coats. As a result, its profit-maximizing number of coats sold increases to 25 a day at $400 per coat.
-Refer to Fact 14.3.1. As a result of increased advertising, Talbots' markup

• A)decreases by $100.
• B)increases by $50.
• C)increases by $75.
• D)decreases by $60.
• E)decreases by an unknown amount.

Identify transactions that increase cash and those that decrease cash.

Analyze and calculate cash flows related to investing activities, including the sale of assets.

Determine the presentation order of activities on the Statement of Cash Flows.

Understand the reporting of cash dividends and their classification in the Statement of Cash Flows.

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Definitions:

Social Identity Threat

The experience of feeling at risk of confirming a negative stereotype about one's social group, which can negatively affect performance and wellbeing.

Self-affirmation

A psychological theory suggesting that individuals can maintain their sense of self-integrity by telling themselves (affirming) positive truths about themselves.

Stereotype Threat

The anxiety or concern experienced when one fears being judged or treated unfairly based on negative stereotypes about their group.

Stigmatized Group

Refers to a social group that suffers from societal disapproval or discrimination because of perceived differences from the majority.