Using the Lagrangian Multiplier Technique,you Allocate Your $1,000,000 Advertising Budget

question 53

Multiple Choice

Using the Lagrangian multiplier technique,you allocate your $1,000,000 advertising budget between four media markets so as to maximize your profits.Your assistant informs you that the Lagrangian multiplier is equal to -$0.50.From this you conclude that:

• A) you are allocating your budget across markets optimally.
• B) advertising is worthless.
• C) another dollar of advertising would increase profits $0.50.
• D) another dollar of advertising would decrease profits $0.50.
• E) you could earn more profit with a larger advertising budget.

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Definitions:

Crystalline Lens

A transparent, flexible structure in the eye that helps to focus light onto the retina, changing shape to aid in visual accommodation.

Surgical Destruction

Surgical destruction refers to the deliberate removal or damage of tissue or organ parts during a surgical procedure for therapeutic purposes.

Nystagmus

Involuntary rhythmic movement of the eyes, which can impair vision and can be a sign of neurological problems.

Involuntary

Actions or processes not under the conscious control of an individual, such as breathing or the heartbeat.