Dorfman-Steiner theorem
The Dorfman – Steiner theorem is a neoclassical theorem which specifies the optimal advertising budget that a company should maintain.
The theorem is named after Robert Dorfman and Peter O. Steiner, who described the theorem in their much-cited article in the American Economic Review in 1954 . Companies can increase their sales by either lowering the unit price or increasing their advertising budget. The optimum is where the ratio of advertising budget to sales is equal to the ratio of advertising elasticity to price elasticity .