text--should be negative. Economies of scale are reduced, usually, as size increases. I argue in note 6 that even if as is positive, one does not expect it to dominate over α5 in equation (A.8). Therefore, as long as εA is less than 1, the demoninator of equation (A.8) will be positive. Under these conditions we expectto be less than 0.
In the analysis in the text two other total derivatives are of interest:and .
By the same arguments as already given one expects the numerator of equation (A.10) to be negative if εA < 1. If εA < 1 one expects the denominator to be positive. Hence if εA < 1(A.11)
Ifis negative and is positive, must be negative.
The industrial classification scheme used in this article is dictated by the availability of advertising data. My basic source of such data is the Leading National Advertisers, National Advertising Investments, which provides information on advertising expenditures for all companies investing $20,000 or more in magazines, newspaper supplements, and network and spot television.32 In addition outdoor advertising expendi-____________________