Good Boy Super Treats produces healthy treats for dogs. At its current advertising level, Good Boy Super Treats marginal cost of advertising is $1 million and their marginal benefit is $1 million. Which of the following is true?
A) If the firm increases the amount of advertising, its net profit will increase.
B) The firm should increase the amount of advertising to increase its net profit.
C) The firm is currently maximizing its net profit.
D) If the firm decreases the amount of advertising, its net profit will increase.
C) The firm is currently maximizing its net profit.
You might also like to view...
If information is asymmetric, explain why the hire contract is not efficient in production and a moral hazard exists, but the fixed fee to the principal contract is efficient and does not pose a moral hazard problem
What will be an ideal response?
A tradable emissions permit program is efficient because the cap protects the environment while: a. generating substantial revenues for the government
b. keeping compliance and administration costs relatively low. c. while requiring the same response by each polluter. d. none of above