Question

State the basic assumption underlying most advertisements

Answer 1

Advertisements are targetted at consumers to try and get them to demand more of the commodity. The ideas behind advertisments are that: 1. Consumers are assumed to be rational, that they can be induced towards buying another good away from the existing commodity they are buying. 2. Consumers are assumed to belong to their particular income group and will in general not come outside the group. Their affordability range is assumed to remain the same. The main assumption is that consumers are assumed to be rational and they will be open to the idea of buying a better and cheaper product.