Question: The Wilson Company’s marketing manager has determined that the price elasticity of demand for its product equals -2.2. According to studies he carried out, the relationship between the amount spent by the firm on advertising and its sales is as follows:
a) If the Wilson Company spends $200,000 on advertising, what is the marginal revenue from an extra dollar of advertising?
b) Is $200,000 the optimal amount for the firm to spend on advertising? Explain why?
Deliverables: Word Document