The average price Washburn charges for a guitar is $349. This price must cover its average costs of $25 for direct materials and $120 in direct labour. It must also cover fixed expenses of $38,000. Assuming everything else stays the same, the company's planned move to Nashville, Tennessee, will reduce its fixed costs by $4,800. This would cause the slope of the total cost curve to __________ and the break-even quantity to __________.
A.
decrease
stay the same
B.
decrease
increase
C.
stay the same
decrease
D.
stay the same
increase
Answer: C
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Marketing
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