The Dorfman-Steiner theorem, in neoclassical economics, characterizes the profit maximizing level of advertising expenditure a firm should undertake, showing that the optimal advertising to sales ratio depends on the price elasticity of demand and the elasticity of sales with respect to advertising. It is named for the economists Robert Dorfman and Peter O. Steiner, who developed the result in a widely cited 1954 article in the American Economic Review.
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StatementThe optimal level of advertising for a firm is found where the ratio of advertising to sales equals the price-cost margin times the advertising elasticity of demand. 2 Classification
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Entity-backed identity for the statement-form enum value this theorem already carries, resolved to a mathematics concept by an explicit value-to-entity map (phase 3 bucket conversion, docs\design_entity_backed_browse_buckets_20260928.md). The statement-form fact itself stays on the theorem unchanged.
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1. Wikipedia: Dorfman-Steiner theorem
WikipediaLead section, statement-form referenceQuote, Lead section, statement-form reference
The optimal level of advertising for a firm is found where the ratio of advertising to sales equals the price-cost margin times the advertising elasticity of demand.
2. Dorfman-Steiner theorem - Wikipedia
Introduction
The optimal level of advertising for a firm is found where the ratio of advertising to sales equals the price-cost margin times the advertising elasticity of demand.
History section
who developed the approach in their widely cited 1954 article in the American Economic Review
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