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 = $9,800, B = $15,000, and C = $8,200, to maximize profit, which of the following should the firm do?

Question

Quizplus · Accepted Answer

To maximize profit, the firm needs to reduce the cost of advertising without significantly decreasing sales revenue. Based on the costs and the current advertising levels, reducing the advertising on the radio (A) and increasing the advertising in newspapers (C) would result in a decrease in costs without a significant decrease in sales revenue. Therefore, the best choice is to decrease advertising on the radio and increase advertising in newspapers, which is Option B.

The Table Above Shows the Current Costs for a Firm