Suppose That at One of the Talbot's Shops, Marginal Cost

Multiple Choice

Suppose that at one of the Talbot's shops, marginal cost of a coat is constant at $150, and total fixed cost is $3,000 a day. The shop maximizes its profit by selling 15 coats a day at $500 per coat. Then the shops nearby increase their advertising. The Talbot shop responds by spending $1,500 a day more on advertising its coats. As a result, its profit-maximizing number of coats sold increases to 25 a day at $400 per coat.
-In the scenario above, as a result of increased advertising, Talbot's average total cost

A) falls by $20 per coat.
B) rises by $50 per coat.
C) rises by $30 per coat.
D) falls by $40 per coat.