Production costs are independent of advertising costs, as advertising only affects demand conditions and not the production process of the firm as defined by its production function. It is also the case that advertising expenditures are made in a previous period and are therefore independent of current output and sales. As such, we may consider advertising expenditure as a fixed cost with a zero marginal cost in the current period. (Note that, as a general rule of thumb, the level of advertising for the next period is commonly set as a proportion of sales revenue in a previous period.)