Suppose that a retailer sells f(p, a) units of an item, where p is the price per unit of the item and a is the amount of money spent on advertising that item. Which of the following indicates that as the amount spent on advertising is decreased, demand for the item also decreases?
A) $\frac { \partial f } { \partial a }$ (50, 75) = -10
B) $\frac { \partial f } { \partial p }$ (50, 25) = -1
C) $\frac { \partial f } { \partial p }$ (50, -1) = -5
D) $\frac { \partial f } { \partial a }$ (50, 25) = 10

Question

Quizplus · Accepted Answer

The partial derivative $\frac { \partial f } { \partial a }$ (50, 25) = 10 indicates that as the amount spent on advertising increases, the demand increases. Conversely, if advertising decreases, demand decreases.

Suppose That a Retailer Sells F(p, A) Units of an Item