Ben Decides to Expand His Ice Cream Store So He

Multiple Choice

Ben decides to expand his ice cream store so he can begin selling sub sandwiches.He spends $20,000 in preparing his new sandwich shop.His marginal cost of selling sub sandwiches is $3 and he estimates that he can sell 10,000 subs for $6 each.He soon learns of a nearby store that is now selling identical subs for $3.50 each.Ben should:

A) quit selling subs since his average total cost of selling subs is greater than the $3.50 price he would now have to charge.
B) sell subs for $3.50 each,considering the $20,000 to be a sunk cost and ignoring it.
C) sell subs as long the price he receives exceeds his average fixed costs of selling subs.
D) lower his price to $5 to cover his average total cost of selling subs.