On the Basis of Past Experience, a Company Has Determined

question 73

Multiple Choice

On the basis of past experience, a company has determined that its sales revenue (in dollars) is related to its advertising according to the formula , where x is the amount spent on radio advertising and y is the amount spent on television advertising. If the company plans to spend $30,000 on these two means of advertising, how much should it spend on each method to maximize its sales revenue? ​

• A) $8,401.47 on radio; $21,598.53 on television
• B) $10,801.89 on radio; $19,198.11 on television
• C) $12,002.10 on radio; $17,997.90 on television
• D) $14,402.52 on radio; $15,597.48 on television
• E) $15,602.73 on radio; $14,397.27 on television

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Definitions:

Discount Rate

The rate of interest that central banks impose on credits extended to commercial banks and other financial entities.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that must be held by a commercial bank, a repeat of the Fed's specific requirement but applicable globally.

Depository Institutions Deregulation

The legislative measures taken to reduce regulation over banks and other depository institutions to enhance their ability to compete and innovate.

Monetary Control Act

A law intended to regulate banking and manage the money supply, possibly referring to specific legislation like the Monetary Control Act of 1980 in the United States, which influenced the Federal Reserve's control over monetary policy.