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For a Profit- Maximising Firm, the Amount It Should Spend

Question 7

Multiple Choice

For a profit- maximising firm, the amount it should spend on promotions should be


A) that where the gap between the marginal revenue from the promotion and the marginal cost of the promotion is at its maximum.
B) that where the marginal revenue from the promotion equals the marginal cost of the promotion.
C) that where the average revenue from the promotion minus the average cost of the promotion is at a maximum.
D) as little as possible because all promotion costs money.
E) that where the average cost of promotion equals the average revenue earned from the promotion.

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