Abstract
This paper analyzes the influence of advertising on price and how advertising helps luxury companies create an expensive price in the market. I first use the profit- maximization model and cost-minimization model to calculate the equilibrium advertising expense and the increased amount of profit after adding advertising as a new variable. I then use the OLS regression model and panel data regression model to test the relationship between advertising expense and total revenue. The result of the empirical models strongly supports my hypothesis that an increase in advertising expense will lead to an increase in total revenue.
Advisor
Histen, Joe
Department
Business Economics
Recommended Citation
Wang, Tieyun, "How Advertising Helps Luxury Companies Charge an Expansive Price: Relationship between Advertising and Price" (2021). Senior Independent Study Theses. Paper 11724.
https://openworks.wooster.edu/independentstudy/11724
Publication Date
2021
Degree Granted
Bachelor of Arts
Document Type
Senior Independent Study Thesis
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