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The National Australia Bank (NAB) received 3,000 inquiries following the latest advertisement describing its 30-month Individual Retirement Account (IRA) accounts in T he Adelaide Review.

The National Australia Bank (NAB) received 3,000 inquiries following the latest advertisement describing its 30-month Individual Retirement Account (IRA) accounts in T he Adelaide Review. The most recent ad in a similar advertising campaign in T he Advertiser, generated 1,000 inquiries. Each T he Adelaide Review ad costs $500, whereas each T he Advertiser ad costs $125. (1). Assuming that additional ads would generate similar response rates, is the bank running an optimal mix of ads in T he Adelaide Review and T he Advertiser? Why or why not? (2). Holding all else equal, how many inquiries must an ad in T he Adelaide Review attract for the current advertising mix to be optimal

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