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Price advertisements should never:

a. include puffery.

b. deceive customers to the point of harming.

c. include the price.

d. use advertising allowances.

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manhokwe tawanda
manhokwe tawandaLv10
12 Jan 2021

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Related questions

Advertising is an economically productive activity and not a waste of resources because:
 
A) Advertisements increase profits
B) Advertisements can convey information about the product
C) In a situation in which consumers don’t have good information about a product, ads, can serve as indirect signals about the provider
D) Advertisements can convey information about the product, and because in a situation in which consumers don’t have good information about a product, ads can serve as indirect signals about the provider
E) None of the above

15. Which of the following illustrates the concept of external cost?

a. Bad weather decreases the size of the cotton crop.

b. An increase in the demand for coke raises the price paid by consumers of pasta, thereby harming these consumers.

c. Smoking harms the health of the smoker.

d. Smoking harms the health of nearby nonsmokers.

The following equation represents the weekly demand that a local theater faces.

Qd = 2000 - 25 P + 2 A,
where P represents price and A is the number of weekly advertisements.
Presently the theater advertises 125 times per week. Assuming this is the only theater in town, and its marginal cost, MC, is equal to zero,

a. Determine the profit maximizing ticket price for the theater.
b. What is the price elasticity of its demand at this price?
c. What is the elasticity of its demand with respect to advertising?
d. Now suppose the theater increases the number of its ads to 250. Should the theater increase its price following this ad campaign? Explain.

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