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

question 151

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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Definitions:

Rational Decision Making

A systematic, step-by-step process for making choices that is designed to result in the most optimal outcome.

Impulse Control

The ability to resist or delay an impulse, drive, or temptation to act and entails self-regulation and discipline.

Postconventional

A stage in moral development where individuals make decisions based on personal principles and the mutual benefit of all, beyond societal norms and conventions.

Social Norms

Social Norms are the unwritten rules that govern acceptable behavior in society or within particular social groups.