Consider firms operating in an industry where the own price elasticity of demand is infinite; that is, EQ,P = -?. Use this information to determine the type of industry in which these firms operate and the optimal advertising-to-sales ratio.
A. Monopolistic industry and 0
B. Perfectly competitive industry and 0
C. Perfectly competitive industry and ?
D. Monopolistically competitive industry and ?
Answer: B
Economics
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What will be an ideal response?
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A) endogenous. B) exogenous. C) unexplained. D) statistically insignificant.
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