What is its profit-maximizing level of advertising

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Reference no: EM131092864

The elasticity of demand for a firm’s product is -4 and its advertising elasticity of demand is 0.12.

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

b. If the firm’s revenues are $70,000, what is its profit-maximizing level of advertising?

Reference no: EM131092864

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