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Post by account_disabled on Feb 22, 2024 1:49:14 GMT -5
PED measures the response of demand to changes in price. impact on demand AED focuses on how advertising can stimulate or reduce demand. PED examines how an increase or decrease in price affects demand. Key variables The key variables in AED are advertising costs and demand. The main variables in PED are price and demand. Profit maximization Businesses use AED to find the optimal level of advertising to maximize revenue. Businesses use PED to find the optimal price level to maximize Phone Number List profits. Advertising elasticity of demand AED and price elasticity of demand PED are two key concepts in economics but they measure different aspects. AED measures the effect of advertising on the demand for a product while PED measures how a change in price affects demand. examples Lets look at three examples of advertising elasticity of demand AED Example Advertising Elasticity of Demand. Electronic gadgets A company that sells electronic gadgets spends an additional on advertising and sees a increase in demand. AED is calculated as Percentage change in change in advertising expenditure .. This means that a increase in advertising spending leads to a . increase in demand for gadgets. Example Fast food restaurant A fast food restaurant decides to cut its advertising budget by and cut its sales by . AED will be percentage change in quantity demanded percent change in advertising expenditure .. This means that a decrease in advertising spending leads to a . decrease in the demand for restaurant food. Example Advertising Elasticity of Demand.
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