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maportil maportil
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3 weeks ago
The Role of Advertising

Consider a gym that earns a profit of $25.75 per member. An advertisement that costs $360.50 would increase membership by 10. To make the advertisement worthwhile, how many of the new members must persuade just one other person to join the gym?

▸ 4

▸ 6

▸ 5

▸ 3
Textbook 

Macroeconomics


Edition: 3rd
Authors:
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eggr0lleggr0ll
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3 weeks ago
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More solutions for this book are available here
4

The total costs of the advertisement are $360.50.

The advertisement increases memberships by 10 at a profit of $25.75 per member. Therefore, total revenue increases by Profit*New Members = $25.75*10 = $257.50.

Net costs of the advertisement equals total cost minus increase in

To recoup these costs, membership needs to increase again by:
Total costs = Profit*Second Wave Members
103.00 = 25.75*Second Wave Members
Second Wave Members= 103.00/25.75 = 4.
1

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maportil Author
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3 weeks ago
Thank you, thank you, thank you!
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You make an excellent tutor!
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2 hours ago
Brilliant
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