Data Concerning Sotero Corporation's Single Product Appear Below: the Company

question 92

Multiple Choice

Data concerning Sotero Corporation's single product appear below: The company is currently selling 5,000 units per month. Fixed expenses are $319,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Sotero Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $12,000 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) decrease of $3,120
• B) increase of $3,120
• C) decrease of $12,000
• D) increase of $15,120

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Definitions:

Group Polarization

The tendency of group members to make decisions that are more extreme than the initial inclinations of its members.

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, typically improving on simple tasks.

Foot-In-The-Door

A persuasion technique where a small request is made first in order to gain compliance for a larger request later.

Door-In-The-Face

A technique in persuasion that involves making a large request that is likely to be refused in order to increase the chances that a person will agree to a smaller request later.