In a situation where demand is more advertising elastic than price elastic it is advisable to _____.
A) maintain the status quo
B) build image via increased advertising
C) grow volume via price discounting
D) increase advertising and/or discount prices
E) decrease advertising and discount prices

Question

In a situation where demand is more advertising elastic than price elastic it is advisable to _____.
A) maintain the status quo 
B) build image via increased advertising 
C) grow volume via price discounting 
D) increase advertising and/or discount prices 
E) decrease advertising and discount prices

Quizplus · Accepted Answer

If demand is more advertising elastic than price elastic, it means that changes in advertising have a greater impact on demand than changes in prices. In this situation, it is advisable to build brand image via increased advertising to attract more customers rather than lowering prices which may only have a marginal impact on demand. Therefore, the best choice is to build the brand image through advertising.

In a Situation Where Demand Is More Advertising Elastic Than