agaytay Open-Air Flea Market is along the highway leading to Taal Vista Lodge.

Arnel has

a stall which specializes in hand-crafted fruit baskets that sell for P60 each.

Daily fixed costs

are P15,000 and variable costs are P30 per basket.

An average of 750 baskets are sold each

day.

Arnel has a capacity of 800 baskets per day.

By closing time, yesterday, a bus load of

teachers who attended a seminar at the Development Academy of the Philippines stopped by

Arnel's stall.

Collectively, they offered Arnel P1,500 for 40 baskets.

Arnel should have

a.

Rejected the offer since he could have lost P500.

b.

Rejected the offer since he could have lost P900.

c

.

Accepted the offer since he could have P300 contribution margin.

d.

Accepted the offer since he could have P700 contribution margin.