Advertising and monopolistic competition?
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Which of the following statements about expenditures on advertising is true? a) When a firm spends a small amount of money on advertising, this signals that the quality of the good is high. b) When a firm spends a large amount of money on advertising, advertising cannot be used as a signal of quality.. c) If a firm knows its product is of low quality, it will be willing to spend large amounts of money on advertising. d) When a firm spends a large amount of money on advertising, advertising can be used as a signal of quality.
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Answer:
I agree with D. I am studying the same thing right now. If a company is willing to spend so much on advertisement, it implies that the company knows their product is good. Some companies choose not to advertise because the know that their product is mediocre
KyufgFgs... at Yahoo! Answers Visit the source
Other answers
i would think D to be true the firm believes in the product and is willing to back it up with advertising
cameron b
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