You are the manager of the marketing department of your company which focuses on the sales of a certain electric vehicle. Last year, your company spent $2 million on advertisements and had overall sales revenue of $40 million.

A recent study indicates that, for each 3 percent increase in TV advertising expenditures, a car dealer can expect to sell 12 percent more carsbut that it would take a 4 percent decrease in price to generate the same 12 percent increase in units sold. Based on this information, should you increase or decrease your firms level of advertising? Explain why, show your calculations.