(Answered) Total marketing effort is a term used to describe the

Finance

Total marketing effort is a term used to describe the critical decision factors that affect demand: price, advertising, distribution, and product quality. Let the variable x represent total marketing effort. A typical model that is used to predict demand as a function of total marketing effort is

D = axb

Suppose that a is a positive number. Different model forms result from varying the constant

b. Sketch the graphs of this model for b = 0, b = 1, 0 6 b 6 1, b 6 0, and b 7 1. What does each model tell you about the relationship between demand and marketing effort? What assumptions are implied? Are they reasonable? How would you go about selecting the appropriate model?

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