The Advertising Response Function Helps Marketers

question 69

Multiple Choice

The advertising response function helps marketers:

• A) create ads that will be noticed by consumers each time the ad runs
• B) use their advertising budgets wisely
• C) calculate the break-even points for each product being advertised
• D) determine the reach and frequency of specific media
• E) select an executional appeal appropriate to the product being advertised

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Definitions:

Variable Cost

Variable cost pertains to a cost that changes in proportion with the level of activity or volume of production in a company.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, which decreases as production increases.

Law Of Diminishing Returns

An economic principle stating that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after a certain point.

Economies Of Scale

The situation when a firm’s average total cost of producing a product decreases in the long run as the firm increases the size of its plant (and, hence, its output).