Arlene opens a donut shop that offers plain, glazed, and chocolate donuts, along with fresh coffee. How could Arlene expand her
business with the least risk to her current profits? (A) Hire someone to tell her how to run her shop more efficiently. (B)Open several new stores in different cities across the country. (C) Expand her current menu to include other products and flavors. (D)Make television and radio commercials for a national advertising campaign.
(C) Expand her current menu to include other products and flavors.
Explanation:
The safer option that would incur lower costs would be for Arlene to expand her store's menu with other products such as water, hot chocolate, and other types of candy. That would be the best alternative because her store already has fixed costs in place, so adding new products would only increase the variable cost and open up new sources of revenue and could be a good source of profit. Conversely, opening new branches, hiring people or advertising would increase costs without opening a new source of revenue.
