The Springfield Bank Received 1,500 Inquiries Following Its Latest Advertisement

question 41

Essay

The Springfield Bank received 1,500 inquiries following its latest advertisement describing its "establish a Certificate of Deposit (CD)-get a free CD (compact disk)" promotion in the Springfield Shopper,a local newspaper.The most recent similar ad in a similar advertising campaign was in the Brockman Business Newsletter.A local business publication generated 500 inquiries.Each ad in the Springfield Shopper costs $500.Each ad in the Brockman Business Newsletter costs $125.Inquiries from both publications have the same success rate in turning inquiries into sales.
(a)Assuming that additional ads will generate similar response rates,is Springfield Bank running an optimal mix of ads in the Springfield Shopper and the Brockman Business Newsletter? Why or why not?
(b)If you claim that the Springfield Bank is currently running an optimal mix of ads,clearly explain why they are using an optimal mix of ads.If you claim that the Springfield Bank is currently not running an optimal mix of ads,clearly explain how the Springfield Bank can better manage the ads.

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Definitions:

Petit Bourgeoisie

The petit bourgeoisie typically refers to the lower middle class segment in society, often engaged in small-scale businesses or entrepreneurial ventures, possessing modest socioeconomic status.

Gini Index

A measure of the inequality of wealth or income distribution within a country.

Kuznet Curve

An economic theory that suggests inequality increases in the early stages of a country's development but decreases as the country becomes more economically advanced.

Feminization of Poverty

The feminization of poverty refers to the phenomenon where women represent a disproportionate percentage of the world's poor, often attributed to wage disparity, unemployment, and the burden of single parenthood.