Which of the following statements about the effects of the size of the market on advertising spending is NOT true?
A) High growth potential is more important than the actual size of the market.
B) It is less expensive to reach the target audience in a large market, due to economies of scale.
C) Audience fragmentation is evident in large markets, therefore advertisers must spend more to reach their target.
D) Excessive advertising expenditures in a small market will lead to wasted coverage.

Question

Quizplus · Accepted Answer

Economies of scale imply that per-unit costs decrease as production increases. However, in the context of advertising, reaching a target audience in a large market can actually become more expensive due to factors like increased competition for ad space and the need to use multiple platforms to effectively reach the audience. Thus, the statement that it is less expensive to reach the target audience in a large market due to economies of scale is not necessarily true.

Which of the Following Statements About the Effects of the Size