Clark Industries currently spends 5 percent of its sales on advertising. Suppose that the elasticity of advertising for Clark is 0.25. Determine the optimal profit margin over price (P ? MC)/P.
A. 15 percent.
B. 25 percent.
C. 20 percent.
D. None of the answers is correct.
Answer: C
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In economics, a "normal profit" is the return to
A) labor. B) capital. C) land. D) entrepreneurshi
The value of output was $100 billion in Northland and $200 billion in Southland. The population of Northland was 50 million and the population of Southland was 30 million. There were 30 million employed workers in Northland and 20 million employed workers in Southland.
A. Northland; the same in both countries B. Northland; higher in Northland C. Southland; higher in Southland D. Southland; the same in both countries
Refer to Figure 16.4. If the economy is initially in equilibrium at P3 and Q1, the appropriate policy to move the economy to an equilibrium at P1 and Q2 would be to
A. Increase government regulation. B. Increase the marginal tax rate. C. Increase the minimum wage rate. D. Increase the investment in human capital.
Which of the following supply shocks will shift the long-run aggregate supply curve rightward?
What will be an ideal response?