Grocery store chains advertise more than convenience stores because:
A) the advertising elasticity of demand is smaller for grocery store chains than for convenience stores.
B) convenience stores have more elastic demand for their products than grocery store chains.
C) the advertising elasticity of demand for convenience stores is near zero and is much smaller than for grocery store chains.
D) all of the above
E) none of the above

Question

Quizplus · Accepted Answer

The advertising elasticity of demand for convenience stores is near zero and is much smaller than for grocery store chains. This means that advertising does not have a significant impact on the demand for convenience stores, while it does have a significant impact on the demand for grocery store chains. Therefore, it makes more sense for grocery store chains to invest more in advertising compared to convenience stores.

Grocery Store Chains Advertise More Than Convenience Stores Because