Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have
A)superior quality.
B)inferior or mediocre quality.
C)low prices.
D)limited availability.

Question

Quizplus · Accepted Answer

Profit-maximizing firms would spend money on advertising for products that have inferior or mediocre quality to create demand and convince consumers to still buy their product rather than a competitor's product. For products with superior quality, low prices, or limited availability, the quality, price, or scarcity of the product would already be enough to create demand without additional advertising expenses.

Defenders of Advertising Argue That It Is Not Rational for Profit-Maximizing