Determine the firm optimal advertising-to-sales ratio

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Reference no: EM131169364

The elasticity of demand for a firm’s product is -3 and its advertising elasticity of demand is 0.15.

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

Instruction: Round your response to 2 decimal places.

_____________

b. If the firm’s revenues are $60,000, what is its profit-maximizing level of advertising?

$___________

Reference no: EM131169364

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