Assume a Car-Detailing Company Can Offer Customers "#1 Mom" Decals

question 17

Multiple Choice

Assume a car-detailing company can offer customers "#1 Mom" decals and flame decals at a zero marginal and average cost.The following table shows each customer's marginal willingness to pay for each individual decal,and for a bundle containing both.Which strategy yields the maximum profit,and what maximum profit is obtained?

• A) Sell separately and make a profit of $130.
• B) Sell separately and make a profit of $180.
• C) Bundle and make a profit of $150.
• D) Bundle and make a profit of $215.

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Definitions:

Disclosure Requirements

Regulations or standards mandating the reveal of certain information by entities, ensuring transparency in financial reporting and governance.

Journal Adjustment

Entries made in the accounting journals to correct or update financial records.

Equity Recognition

The process of including equity investments in the financial statements of an investor, reflecting ownership interest in a company.

Revaluation Surplus

An increase in value of an asset, reflected in the books of account, over its previously recorded net book value.