Question

An increase in promotional budgets has:
a) Increasing returns up to about $2 million, then constant returns over time
b) Diminishing returns up to about $2 million, then increasing returns over time
c) Constant returns over time Increasing returns over time
d) Diminishing returns starting around $2 million

Answer 1

Answer:

d) Diminishing returns starting around $2 million

Explanation:

The promotional budget affects awareness, so increasing the budget brings attention the product on market leading to more costomers demanding it and altemately increaseign the diminishing returns.