Thornbrough Corporation Produces and Sells a Single Product with the Following

question 29

Multiple Choice

Thornbrough Corporation produces and sells a single product with the following characteristics:
The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Thornbrough Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $53,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,000 units.What should be the overall effect on the company's monthly net operating income of this change?

• A) decrease of $105,000
• B) increase of $149,000
• C) increase of $105,000
• D) decrease of $21,000

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Definitions:

Stanley Milgram

An American social psychologist best known for his controversial experiments on obedience to authority conducted in the 1960s.

Leon Festinger

A psychologist known for his theory of cognitive dissonance, which suggests that inconsistency among beliefs or behaviors causes psychological tension that people are motivated to reduce.

Philip Zimbardo

An American psychologist known for conducting the Stanford prison experiment, exploring how social situations can influence human behavior.

Collectivist Cultures

Societies that prioritize collective goals over individual achievements, emphasizing community and social interconnectedness.