A firm can signal the high quality of its product by
A)spending nothing on advertising to convey that the product is so good that the firm does not even need to advertise.
B)spending a large amount of money on advertising.
C)getting a patent for the product.
D)not worrying about getting a patent for the product.

Question

Quizplus · Accepted Answer

Spending a large amount of money on advertising can signal high quality because it suggests the firm is confident in the product's success and is willing to invest heavily in promoting it.

A Firm Can Signal the High Quality of Its Product