Author Question: Suppose we advertise up to the point where the last dollar spent on advertising generates an ... (Read 71 times)

Yi-Chen · **on:** Jul 1, 2018

Suppose we advertise up to the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one).

If the full marginal cost of advertising is greater than one, then we will generate: A) less output than the profit maximizing level.
B) more output than the profit maximizing level.
C) the profit maximizing level of output.
D) We don't have enough information to answer this question.

Question 2

Which of these statements is generally accepted by economists? Perfect competition

A) provides both equity and efficiency.
B) provides equity but not necessarily efficiency.
C) provides efficiency but not necessarily equity.
D) generally satisfies neither efficiency nor equity.