36. Persuasive advertising: A) is informative. B) is wasteful. C) can create mar

Question

36. Persuasive advertising: A) is informative. B) is wasteful. C) can create market power for firms through brand differentiation D) has been shown to do little to increase sales. 37. Price advertising typically A) raises prices for consumers, as the cost of advertising is simply passed off to consumeTs B) raises prices and lowers outpat for consumers C) is wasteful advertising. D) lowers prices and increases consumer welfare. 38. If a firm has an average product that is not much better than what other fims produce they may wish to focus their advertising on A) quality. B) price. C) deceiving customers D) product information. 39. Monopolistically competitive firms are able to charge: A) P> MC, eliminating any lost gains from trade B) P> MC, so output is produced at minimum per unit cost. C) P> MC, causing an inefficiently lower level of output. D) P-MC, maximizing social surplus. A) sell no output B) continue to sell the same amount of output. C) go out of business. D) sell less output Page 7

Explanation / Answer

36) Answer (C). Persuasive advertising can "create market power for firms through brand differentiation".
-It is a type of adverstising that targets to persuade a consumer for buying a specific product, especially in the presence of several similar competitive products.

37) Answer (D). It "lowers prices and increases consumer welfare".

38) Answer (B).Focussing on quality and product information is not suggested as the quality is average. An advertising can and never should focus on deceiving customers.

39) Answer (C). P>MC, causing an inefficiently lower level of output.

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.