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Bella bakes cookies. Her total fixed cost is $48 a day and her average variable cost is $1.20 a bag. Few people know about Bella's
Bella bakes cookies. Her total fixed cost is $48 a day and her average variable cost is $1.20 a bag. Few people know about Bella's Cookies, and she is maximizing hwer profit selling 12 bags a dat for $5.50 a bag. Bella thinks that if she spends $60 a day on advertising, she can increase her market share and sell 30 bags a day for $5.50 a bag. If Bella advertises, should she continue to sell her cookies for $5.50 a bag or should she change her price?
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