Assuming there is no change in a product's price or the quantity demanded, if a business owner wants to increase her advertising expenses by $500 monthly, this would cause total costs to ________ and the break-even quantity to
A) decrease; stay the same.
B) increase; increase.
C) decrease; increase.
D) stay the same; increase.
E) stay the same; decrease.

Question

Quizplus · Accepted Answer

Increasing advertising expenses raises total costs, requiring more sales to cover these costs, thus increasing the break-even quantity.

Assuming There Is No Change in a Product's Price or the Quantity