To maximize profits, the firm should increase advertising expenditures

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    until the marginal advertising expenditure equals the marginal revenue generated from the advertising.
     until the marginal revenue generated net of marginal cost of production equals the additional advertising expenditure.
     until marginal revenue from advertising exceeds the full marginal cost (marginal advertising plus marginal production cost) of advertising.
     until the marginal advertising expenditure equals the marginal cost of production.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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until the marginal revenue generated net of marginal cost of production equals the additional advertising expenditure.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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