Asked by Helin Çiftçi on Sep 24, 2024
Verified
If advertising makes demand of a product less elastic,it makes sense for a firm to
A) Decrease the price of the product
B) Increase the price of the product
C) Leave the price unchanged
D) None of the above
Less Elastic
Less elastic refers to a demand or supply that is relatively unresponsive to changes in price compared to a perfectly elastic curve.
Increase Price
A decision by a supplier or manufacturer to raise the cost at which goods or services are sold.
- Understand the impact of advertising on product demand elasticity.
Verified Answer
CP
Christina Proctor3 days ago
Final Answer :
B
Explanation :
Since advertising makes demand less elastic, customers become less sensitive to price changes and are thus more likely to purchase the product even if its price increases. Therefore, it makes sense for the firm to increase the price of the product to maximize profits.
Learning Objectives
- Understand the impact of advertising on product demand elasticity.
Related questions
A Discount Shoe Manufacturer's Advertisement Suggests That They Are Almost ...
Advertising Claiming Superior Quality of a Product Makes Its Demand ...
If Advertising Makes Demand of a Product More Elastic,it Makes ...
A Swiss Watch Company Advertises Its History of Superior Craftsmanship ...
By Focusing the Customers on the Price of a Product,you ...