A positive correlation between advertising costs and sales indicates that as advertising spending increases, sales also tend to increase. In a graphical representation, this would typically be shown as an upward-sloping line from left to right, signaling a direct relationship between the two variables.
Regarding the slope of the graph, a steeper slope would be more favorable to the owners of the company. A steeper slope indicates a stronger relationship between advertising costs and sales, meaning that for every additional unit spent on advertising, there is a proportionally larger increase in sales. This suggests that the money spent on advertising is highly effective in generating revenue, which would likely lead to greater profits.
On the other hand, a flatter slope indicates a weaker relationship — the increase in sales generated from additional advertising spending would be less significant. This could suggest diminishing returns on advertising investment and might lead to concerns about the efficiency of the advertising strategy.
In summary, company owners would generally prefer a steeper slope in the graph comparing advertising costs and sales, as it reflects greater effectiveness and better returns on their advertising investments.