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so this progress and that for every two dollars is spent on advertising the business sees
three dollars increase in sales
we want to know what the relationship is between the changing money spent on advertising changing
received sales
kids are include is going to be the amount spent on advertising are output is to me how
much we get into sales and see if we can generalize is to some kind of formula
so
take a look
let's start by building a table
let's assume that if the company spends nothing on advertising they get five dollars in sales
most think about how they kept it
he dollars in sales
if we increased the advertising costs by two dollars
then we would expect our sales to increase by three dollars because for every two dollars
spent in advertising
the sales increase by three
what if they only increasing advertising by one dollar
the traditional school of thought
twas sales would be six
jan
his advertising about one dollar
so their sales went up by three house
the dollar
we're wanting to dollars to for every one dollar increase in advertising
for sales are going to go up by one and a half
similarly
what if we want up to
the dollars
and with increased eight dollars in advertising
that one dollar
in advertising
times eight
kansas city dollar increase
so we can be multiplying by he over here
I remember that for every one dollar in advertising
it was three hassidic dollars in sales
so three has times eight
he is the change
between five and seventy
history has times age twelve
adding that to the five to seventeen which desert total settles
it's really the same thing to give
what happens when we need to spend nine half dollars on advertising
start-up zero
and we increased our advertising cuts by nine
similarly
we started at five in sales
and then
we increased by nine and a half
we multiply that by three have speakers that's are
concentrated change
so now
let's take a look at what we have here
we have a proportional relationship between the change in sales in the change in advertising
costs it's always going to be three house
that's what gives us the story of your graph
no matter what
advertising
price we take and what
sales for a sneak peak
if you look at the ratio of the change in advertising
the change in sales
we're getting to it
three acts
now to generalize
suppose that's the business that has nothing on advertising he has W style dollars and
say it's peace and don't you give me any amount least five last time
bernard table skin look like this
so for one dollar increase in advertising is that B-PLUS
three has adopted
for to study plus three add tires to for ten dollars spent in advertising W plus three
hats
times end
so unfortunate a shrewd migrate passive and peoples
do you
plus three had sent
in this case the slope
which is three hats
represents that change
it's a constant change
in advertising
it's a child consultations else with respect to advertising
but in this case history helps