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Using the Lagrangian Multiplier Technique,you Allocate Your $1,000,000 Advertising Budget

Question 53

Multiple Choice

Using the Lagrangian multiplier technique,you allocate your $1,000,000 advertising budget between four media markets so as to maximize your profits.Your assistant informs you that the Lagrangian multiplier is equal to -$0.50.From this you conclude that:


A) you are allocating your budget across markets optimally.
B) advertising is worthless.
C) another dollar of advertising would increase profits $0.50.
D) another dollar of advertising would decrease profits $0.50.
E) you could earn more profit with a larger advertising budget.

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