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Demand function: Q it (A it ) = i + A it + e it Profit function: (A) = 6Q(A) 5.5Q(A) A 2 Using this
Demand function: Qit(Ait) = i + Ait + eit
Profit function: (A) = 6Q(A) 5.5Q(A) A2
Using this profit function, solve for the profit maximizing advertising level as a function of i , , and eit.
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Economics Today
Authors: Roger LeRoy Miller
16th edition
132554615, 978-0132554619
