What is the elasticity of demand with respect to advertising

Assignment Help Business Economics

Reference no: EM131161482

The following equation represents the weekly demand that a local theater faces.

Qd = 2000 - 25 P + 2 A,

where P represents price and A is the number of weekly advertisements.

Presently the theater advertises 125 times per week. Assuming this is the only theater in town, and its marginal cost, MC, is equal to zero,

A. Determine the profit maximizing ticket price for the theater.

B. What is the price elasticity of its demand at this price?

C. What is the elasticity of its demand with respect to advertising?

D. Now suppose the theater increases the number of its ads to 250. Should the theater increase its price following this ad campaign? Explain.

Reference no: EM131161482

Questions Cloud

How to contact agency and what services they have available : Contacted two local community agencies (not just Web sites) that can help provide information, training, or support about the problem. Included specifics on how to contact the agency, what services they have available, and how much these services ..

Problem regarding the movement of technology : Future Shock is a great look at what can happen based on todays movement of technology. Just because we can do something, SHOULD we be doing it? Arent there things that technology can do that ultimately make us less human? Do marketers have a resp..

Explain how social-political and economic institutions : Explain how social, political, and economic institutions interact with one another. You may explain by using an example, if you wish. Describe the effects of tariffs not shown by partial equilibrium analysis. (Partial equilibrium analysis is shown in..

New business for a new environment : Watch the video case study "Geek Squad: A New Business for a New Environment." Read the case study discussion on pp. 88-89 of the Marketing text. Keep this case study in mind as you complete this assignment.

What is the elasticity of demand with respect to advertising : The following equation represents the weekly demand that a local theater faces. Determine the profit maximizing ticket price for the theater. What is the price elasticity of its demand at this price? What is the elasticity of its demand with respect ..

Compare and contrast the customer service reputations : Compare and contrast the customer service reputations of these two companies. Your paper should address the following questions.

What is the power dissipated in rc because of this change : What is the new value of IC and VCE? - What is the power dissipated in RC because of this change? - What is the power dissipated in the transistor because of this change?

Online source of global-national : a. Select a print, broadcast, or online source of global, national, or local news. b. Use this publication to select a current (within the past 6 weeks) news story or series of related articles of interest to you.

Which design has rodrigo employed : First, he interviewed students and then he used insights from the interviews to construct a survey to collect quantitative data. Which design has Rodrigo employed?

User Account

All Pages