The authors note that advertising can make the consumer demand for a product more elastic (price responsive) by expanding the potential range of consumers
As this change in demand occurs (ceteris paribus), what happens to the optimal advertising-sales ratio? A) Increases
B) Decreases
C) Remains the same
D) We do not have enough information to answer this question
B
You might also like to view...
Which of the following is true, according to the law of diminishing marginal utility?
a. The marginal utility of Diane's second Coke is greater than the marginal utility of her third pretzel, other things constant. b. The marginal utility of Diane's second Coke is greater than the marginal utility of Ken's third pretzel, other things constant. c. The marginal utility of Diane's second Coke is greater than the marginal utility of her third Coke, other things constant. d. The total utility of two Cokes is greater than the total utility of three Cokes, other things constant. e. The marginal utility of Diane's second Coke is greater than the marginal utility of Ken's third Coke, other things constant.
Which statement is true?
A. Only the poor are hurt by inflation. B. During times of inflation the nominal interest rate is considerably higher than the real interest rate. C. People living on fixed incomes are generally helped by inflation. D. None of the statements are true.
Steady-state investment per worker is positively related to the capital-labor ratio because the higher the capital-labor ratio,
A. the less the economy needs to equip new workers with the same high level of capital. B. the greater the amount of resources available for capital investment. C. the more investment per worker is required to replace depreciating capital. D. the lower the capital depreciation rate.
Which of the following regulatory procedures transfers wealth from consumers to producers?
A. Transaction costs B. Efficiency wages C. Import quotas and tariffs D. Deadweight loss