Drill Quest,Inc $Q = 1,200 - 0.05 P$ If Drill Quest Wishes to Use Cost-Plus Pricing,it Can Maximize

Drill Quest,Inc.manufactures drill bits for the oil industry.Drill Quest uses cost-plus pricing to set the price of its bits.Currently Drill Quest applies a 50 percent markup on average total cost.Average variable cost of producing bits is constant and equal to $6,000 per bit.Total fixed cost at Drill Quest is $550,000.DrillQuest currently produces 690 bits.Statistical estimation of demand for Drill Quest brand bits produces the following linear demand equation (where Q is the number of bits demanded and P is the price of bits) : $Q = 1,200 - 0.05 P$ If Drill Quest wishes to use cost-plus pricing,it can maximize profit by applying a markup of _____ percent on __________.

A) 150 percent; AVC
B) 150 percent; ATC
C) 50 percent; AVC
D) 50 percent; ATC
E) 250 percent; AVC