The managers of a firm would like to run a marketing campaign, where they need to set a marketing budget, say M.

The managers know that the demand for the firm's product has two components:

• The first component is the base demand, say .
• The second piece is the variable demand, which depends on the price, p, and the marketing budget, M. Specifically, For any given p and M, the variable demand is M p , where is a parameter measuring the effect of the price on the demand.

Combining these two pieces together, the total demand for the firm's product is p + M, for any given price and marketing budget.

The managers constructed the spreadsheet model given in the above Excel file to study the effects of the marketing budget on the firm's profits. The file has some missing calculations (highlighted with yellow background).

Answer the following questions based on the information given above.

a) Which of the Excel formulas given below in the the drop-down menus calculates the demand for the firm's product?

b) Which of the Excel formulas given below in the the drop-down menus calculates the firm's profit?