Which of the following is true about advertising by a firm?
A) It is not always successful in increasing demand for a firm's product.
B) It attempts to increase demand and to make demand more inelastic.
C) It may reduce per unit costs of production when economies of scale are experienced.
D) All of these.

Question

Quizplus · Accepted Answer

A) This statement is true because advertising is not a guarantee of success and may not always result in increased demand.
B) This statement is also true as advertising aims to create a brand image and increase the perceived value of the product, making demand less sensitive to price changes.
C) This statement is partially true because advertising can lead to increased sales volume, which can result in economies of scale and lower per unit costs. However, this is not always the case, and advertising itself is not directly related to reducing per unit costs of production. 
Therefore, all three statements are true and the correct answer is D.

Which of the Following Is True About Advertising by a Firm