If Bianca advertises, will she continue to sell her cookies for $5 a bag or will she

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If Bianca advertises, will she continue to sell her cookies for $5 a bag or will she change her price?

Bianca bakes delicious cookies. Her total fixed cost is $40 a day, and her average variable cost is $1 a bag.
Few people know about Bianca’s Cookies, and she is maximizing her profit by selling 10 bags a day for $5 a bag. Bianca thinks that if she spends $50 a day on advertising, she can increase her market share and sell 25 bags a day for $5 a bag.

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Economics

ISBN: 9781292433639

14th Global Edition

Authors: Michael Parkin

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