Cigarette producer advertising expenditures

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Reference no: EM131001890

Consider the following annual data on approximate cigarette sales and cigarette producer advertising expenditures over the 1986-1990 period:

Year CIG ADV

1986 580 2400

1987 577 2700

1988 555 3000

1989 530 3300

1990 500 3600

Note: CIG = Annual cigarette sales (in billions of packs) and ADV = advertising expenditures of cigarette producers (in millions of dollars.) Sketch the shape of the curve depicting the relationship between CIG and ADV, placing CIG on the vertical axis and ADV on the horizontal.

Discuss the relationship between CIG and ADV by

i) Discussing the direction of the relationship between the two variables and ii) discussing whether or not the slope of the curve is constant when moving along the curve.

Reference no: EM131001890

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