Question
7. In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in
7. In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demand is -1.5 and the advertising elasticity of demand is 0.6, would you expect an increase or decrease in total revenue?
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
