You Own a Small Bookstore $1 /2$ Of 1 Percent

question 9

Multiple Choice

You own a small bookstore. You have hired a marketing firm to calculate your own price elasticity of demand and your advertising elasticity of demand. The firm has provided you with the relevant numbers regardless of minor adjustments in price or advertising budget. Your own price elasticity of demand is around -1.7, and your advertising elasticity of demand is around 0.05. What should your approximate advertising-to-sales ratio be?

• A) \(1 /2\) of 1 percent.
• B)1 percent.
• C)3 percent.
• D)34 percent.

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Definitions:

Wood

Wood is a hard, fibrous material derived from trees and used in construction, manufacturing, and as a fuel source among other purposes.

Increase In Price

This occurs when the cost of a good or service rises, which can be influenced by various factors such as supply and demand, production costs, and inflation.

Ice Cream

A frozen dessert made from dairy products, such as milk and cream, often combined with fruits, flavors, or other ingredients.

Frozen Yogurt

A dessert made from yogurt and sometimes other dairy products, frozen to a soft consistency, often served as a healthier alternative to ice cream.