Question

Advertising always results in higher prices for products. is a waste of resources. costs so much...

Advertising

always results in higher prices for products.

is a waste of resources.

costs so much that it reduces the chance to achieve economies of scale in production.

guarantees a product's success.

None of these alternatives is correct.

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Answer #1

Advertising does not always lead to higher prices of the product. There is an extra expenditure that is incurred in advertising a product but this is only in the beginning stages. As the production increases the company will get the benefit of economies of scale and then the prices of the product will start to decrease. So 1st option is wrong.

Advertising is not a waste of resources. It is infact increasing the demand of the product that wil eventually help to increase sales and get more revenue. So 2nd option is wrong.

The third option i.e. advertising costs so much that it reduces the chance to achieve economies of scale is also incorrect. Advertising will only be expensive in the beginning stages. Later on the company will be able to enjoy economies of scale. So 3rd option is also incorrect.

Thus, none of the alternatives are correct.

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