A study on optimal advertising level

It considers advertising as an instrument to increase the stock of goodwill or reputation, summarising the effects of past and current advertising expenditures carried out by a firm, on the current demand for her goods. A relevant result emerging from the Dorfman–Steiner condition, establishing that advertising investment is proportional to sales. This paper investigates optimal advertising level between the good firm and the bad firm. So, we knew that between the good firm and the bad firm are establishing the Dorfman–Steiner condition.