The debate over the efficiency of markets in which products with brand names are sold

Question

Quizplus · Accepted Answer

The efficiency of markets in which products with brand names are sold depends on whether consumers are rational in their choices. If consumers make rational decisions based on price and quality, then the market will function efficiently. However, if consumers are influenced by branding and advertising, then the market may not be efficient as they may choose products based on their brand name rather than their price or quality. The debate is not about the role of regulation in advertising or the effectiveness of identifying price differences, and it is unlikely to be resolved by anecdotal evidence.

The Debate Over the Efficiency of Markets in Which Products