Question
The elasticity of demand for a firm's product is -4 and its advertising elasticity of demand is 0.32. a. Determine the firm's optimal advertising-to-sales ratio.
The elasticity of demand for a firm's product is -4 and its advertising elasticity of demand is 0.32.
a. Determine the firm's optimal advertising-to-sales ratio.
Instruction:Enter your response rounded to two decimal places.
b. If the firm's revenues are $30,000, what is its profit-maximizing level of advertising?
$
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
