One way sellers can credibly signal that they have a high-quality product is to:
A)sell very little of their product in order to create scarcity.
B)spend a lot of money on advertising.
C)lower their marginal cost of production.
D)simply tell buyers more about their product.

Question

Quizplus · Accepted Answer

Compared to a seller with high-quality product, a seller with a low-quality product is less likely to find it worthwhile to spend a lot of money on advertising because even if the seller with the low-quality product can convince buyers to buy their product once, they will be less likely to generate repeat sales than will a seller with a high-quality product. This makes expensive advertising a credible signal of quality.

One Way Sellers Can Credibly Signal That They Have a High-Quality