Random learnings_18jan

Posted by Todd Phillips | Posted on 5:34 AM

ADVERTISing--

GOODs--because it increases the flow of information in the economy.

intensifies competition cos consumers can be aware of the best product in market.

BUT

BADs--manipulates customer's tastes

increasing
the ability of firms to charge more than marginal cost. Heavy
spending on advertising may also create a barrier to entry,
as a firm entering the market would have to spend a lot on advertising
too.

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