Suppose the cost of producing a 30 second commercial for television is $100,000.

Question

Suppose the cost of producing a 30 second commercial for television is $100,000. If airtime on the evening news costs $200,000 and is viewed by 5 million people, what is the advertising cost per potential customer?

a. $.03 per potential customer, or $30.00 per 1000 customers

b. $.05 per potential customer, or $50.00 per 1000 customers

c. $.06 per potential customer, or $60.00 per 1000 customers

d.         $.08 per potential customer, or $80.00 per 1000 customers

e.         $.20 per potential customer, or $20.00 per 1000 customers

Explanation / Answer

Answer
The cost is cost of production and airtime cost
=100000+200000
=300000
The add is looked by 5 million people
AC per person is =300000/5000000
=0.06
or for thousands customer
=0.06*1000
=$60
Option c

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