Managerial Economics And Business Strategy 9th Edition (without Access Code)
9th Edition
ISBN: 9781260263176
Author: Michael R. Baye, Jeffrey T. Prince
Publisher: McGraw Hill
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Chapter 8, Problem 8CACQ
The elasticity of demand for a firm’s product is -2.5 and its advertising elasticity of demand is 0.2.
- Determine the firm’s optimal advertising-to-sales ratio.
- If the firm’s revenues are $40,000, what is its profit-maximizing level of advertising?
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