Which of the following statements describes an inherent weakness in the use of the marginal-analysis model for establishing an advertising budget?
A)It is unsuitable as a basis for budgeting only in the case of direct response advertising.
B)It only considers environmental factors that affect the effectiveness of the promotional program.
C)The budget is often set according to the FIFO method.
D)The budget is determined by management solely on the basis of what is felt to be necessary.
E)It assumes that sales are determined solely by advertising and promotion.

Question

Quizplus · Accepted Answer

The inherent weakness of marginal analysis model is that it assumes that sales are solely determined by advertising and promotion. In reality, sales can be influenced by many other factors such as price, product quality, competition, and economic conditions.

Which of the Following Statements Describes an Inherent Weakness in the Use