5. Consider the elasticities reported in the table below. The easiest way to think about the advertising elasticities is the following: Total demand consists of demand today and tomorrow. The shortrun elasticity is the effect that advertising today has on demand today whereas the long-run elasticity is the effect that advertising today has on demand tomorrow. In which industries do you expect advertising intensity to be high? Distinguish between short run and long run. Table 1: Elasticities for selected product categories Short-run Long-run Income Price advertising advertising elasticity elasticity elasticity elasticity Bakery 0.7 0.3 0.2 0.3 products Books 2.2 0.8 0.3 0.4 Drugs 0.7 1.1 0.7 1.0 Tobacco 0.0 1.8 0.4 0.6 products