Business, 26.11.2019 00:31 zoieisabella

Last month you assumed the position of manager for a large car dealership. the distinguishing feature of this dealership is its "no hassle" pricing strategy; prices (usually well below the sticker price) are posted on the windows, and your sales staff has a reputation for not negotiating with customers. last year, your company spent $8 million on advertisements to inform customers about its "no hassle" policy, and had overall sales revenue of $40 million. a recent study from an agency on madison avenue indicates that, for each 5 percent increase in tv advertising expenditures, a car dealer can expect to sell 2 percent more cars—but that it would take a 1 percent decrease in price to generate the same 2 percent increase in units sold.

assuming the information from madison avenue is correct, should you increase or decrease your firm’s level of advertising?

1-the firm should not change advertising.

2-the firm should increase advertising.

3-the firm should decrease advertising.

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