Why does perfect competition shun advertising? Does advertising benefit a monopoly?
In perfect competition, advertising expenditure by firm X will bring most of its benefits to the other firms in the industry, because the ads, if they work, will induce customers to buy more of the identical product from among any of its many sellers. But if a monopoly takes over from a perfectly competitive industry, it may very well pay to advertise. If management believes that the creative touch of the advertising agency can make consumers rush to the market to purchase the product whose virtues have been extolled on television, then the firm will allocate a substantial sum of money to accomplish this feat. This type of expenditure could shift the demand curve outward.
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Name the two international institutions that have been formed to attain higher rates of global economic growth and briefly discuss what each of the agencies does
What will be an ideal response?
Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment. Pat's accounting profit is ________, and Pat's economic profit is ________.
A. $50,000; $15,000 B. $15,000; -$1,000 C. $34,000; $15,000 D. $34,000; -$1,000
Which of the following are policy levers?
A Population growth, spending behavior, and invention B. Wars, natural disasters, and trade disruptions C. Government regulation, tax policy, and the availability of money D. Jobs, prices, and growth
Wealthy countries increasingly feel that trade:
A. can sometimes be a more powerful lever than aid to help poorer countries develop. B. is sometimes acting as a barrier to poorer countries' development. C. is an effective political tool to use against poorer countries. D. can help poorer countries development, but hurt their overall growth.