Data Concerning Damberger Corporation's Single Product Appear Below

question 205

Multiple Choice

Data concerning Damberger Corporation's single product appear below:
The company is currently selling 5,000 units per month. Fixed expenses are $243,000 per month. The marketing manager believes that an $11,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

• A) increase of $200
• B) decrease of $200
• C) increase of $10,800
• D) decrease of $11,000

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Definitions:

Food-Stamp Program

A U.S. federal aid program, now known as the Supplemental Nutrition Assistance Program (SNAP), that provides food-purchasing assistance for low- and no-income people.

Farm Subsidies

Government payments provided to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such goods.

Political Logrolling

A practice in politics where two or more parties exchange support for each other's benefit, often seen in legislative voting.

U.S. Price Support Program

Government initiatives designed to stabilize or increase market prices typically for agricultural products, by buying excess supply or offering subsidies.