Economics Elasticity Of Demand Questions
The concept of advertising elasticity of demand refers to the measure of how responsive the demand for a product or service is to changes in advertising expenditure. It quantifies the impact of advertising on consumer behavior and determines the effectiveness of advertising in influencing the quantity demanded of a product. A positive advertising elasticity of demand indicates that an increase in advertising expenditure leads to a proportionate increase in demand, while a negative elasticity suggests that advertising has a diminishing effect on demand.