Economists defend brand names as useful to consumers because brand names
A)provide consumers with information about quality when quality cannot easily be judged in advance of purchase.
B)give firms a financial incentive to maintain the high quality associated with their brand name.
C)convince consumers to spend more for products nearly identical to generic versions.
D)Both a and b are correct.

Question

Quizplus · Accepted Answer

Brand names provide consumers with information about quality when quality cannot easily be judged in advance of purchase, which is useful to consumers. Additionally, brand names give firms a financial incentive to maintain the high quality associated with their brand name, which benefits consumers. Therefore, both options A and B are correct. Option C is not accurate as brand names may convince consumers to pay more, but usually for better quality products, not nearly identical ones.

Economists Defend Brand Names as Useful to Consumers Because Brand