Use your estimate to predict what will happen to egg sales.?

Question

Suppose the demand for eggs is affected by the amount spent on advertising. If a 3 percent increase in advertising expenditure results in a 2 percent increase in quantity demanded what is the elasticity of demand with respect to advertising? Be sure to state the formula for advertising elasticity. Suppose now that the advertising budget is reduced

by 10 percent. Use your estimate to predict what will happen to egg sales.

Answer 1

E(a)=2/3≈0.67

ΔQ= -10*0.67= -6.7%