The S-Shaped Response Function Implies That

question 20

Multiple Choice

The S-shaped response function implies that:

• A)initial advertising expenditures will have little impact on sales.
• B)advertising expenditures will have major impact on sales.
• C)sales effects will follow the microeconomic law of diminishing returns.
• D)sales will immediately increase then decrease.
• E)sales will immediately decrease then increase.

---

Definitions:

Foreign Currency

Currency that is used in a country other than the one where a company or individual is based.

Foreign Exchange

The conversion of one country's currency into another currency.

Functional Currency

The currency of the primary economic environment in which the entity operates and reports its financial statements.

Depreciation Expense

The allocated reduction in the carrying value of a tangible fixed asset over its useful life.