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Determine the firm optimal advertising-to-sales ratio

Assignment Help Business Economics
Reference no: EM132461322

Problem: The elasticity of demand for a firm's product is -2.5 and its advertising elasticity of demand is 0.2.

Question 1: Determine the firm's optimal advertising-to-sales ratio?

Question 2: If the firm's revenues are $40,000, what is its profit-maximizing level of advertising?

Reference no: EM132461322

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