An advertising elasticity of demand equal to 2.5 means that

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    When advertising expenditures increase from $10,000 to $12,000, the quantity demanded will increase by 50%.
     When advertising expenditures increase from $10,000 to $12,000, the quantity demanded will increase by $5,000.
     When advertising expenditures increase by 1%, the quantity demanded will increase by 25%.
     When advertising expenditures increase by 10%, quantity demanded increases by 2.5%.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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When advertising expenditures increase from $10,000 to $12,000, the quantity demanded will increase by 50%.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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