Optimal Adjustments to Changes in the Price of Advertising

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 It is commonly argued that mandatory reductions in advertising result in decreased consumption of the advertised product and reductions in product price. A prime example is the case of Action for Children's Television (ACT), who throughout the 1970s campaigned to reduce TV advertising of sugared products during children's viewing hours. ACT implicitly claimed that mandatory advertising reductions would reduce the quantity of sugared products consumed by children. This paper shows that this need not be the case.