I don't know if there is such a setting in Outlook itself; however it may be
that your Internet Service Provider has a size limit on email; 1 megabyte
seems low but you may want to contact them.
That's irrelevant. Your ISP should very well allow you to receive much more
that you're allowed to send. It's their server and they can make the rules
they want.
What happens, exactly, when you try to send a larger message?
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