Suppose You Own a Business and Your Own Price Elasticity

question 1

Multiple Choice

Suppose you own a business and your own price elasticity is -2. In addition, suppose your advertising elasticity of demand is 0.50. If your marginal cost per unit is $4, what is your optimal advertising-to-sales ratio?

• A)0.25
• B)0.375
• C)0.625
• D)1.25

---

Definitions:

Durham Rule

A legal standard used to determine criminal liability on the basis of the defendant's mental state at the time of the offense.

Moral Treatment

An approach to mental health care in the 19th century that emphasized humane treatment, moral discipline, and the therapeutic value of work and leisure activities.

Philippe Pinel

A French physician renowned for his contributions to the humane treatment of the mentally ill in the late 18th and early 19th centuries.

Mental Hygiene

The practice of maintaining mental health through the prevention and treatment of mental disorders, as well as by promoting healthy lifestyles and environments.