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Determine the firm optimal advertising-to-sales ratio

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Reference no: EM131447783

The elasticity of demand for a firm's product is -4 and its advertising elasticity of demand is 0.2.

a. Determine the firm's optimal advertising-to-sales ratio.

Instruction: Round your response to 2 decimal places. ________

b. If the firm's revenues are $50,000, what is its profit-maximizing level of advertising? $_________

Reference no: EM131447783

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