The Table Above Shows the Current Costs for a Firm

question 107

Multiple Choice

The table above shows the current costs for a firm to advertising on the radio, television, and newspaper.
-Refer to the table above. If at the current advertising level, A = $10,000, B = $15,500, and C = $7,800, to maximize profit, which of the following should the firm do?

• A)The firm should decrease its advertising on the radio and increase its advertising in newspapers.
• B)The firm should decrease its advertising on the radio and decrease its advertising in newspapers.
• C)The firm should decrease its advertising on the television and increase its advertising in newspapers.
• D)The firm should increase its advertising on the television and decrease its advertising in newspapers.

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Definitions:

Rate of Production

The speed at which goods or services are produced, usually measured over a specific time period.

Plant Workers

Individuals employed in industrial or manufacturing settings, responsible for operating machinery and producing goods.

Compounded Semiannually

The calculation of interest where the earned interest is added to the principal every six months, resulting in interest on interest.

Compounded Annually

Interest calculation on a loan or investment once per year where each year's interest is added to the principal.