Suppose We Advertise Up to the Point Where the Last

Multiple Choice

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.