If advertising makes a firm's demand curve more inelastic, it is probably because
A) the advertising backfired
B) the goods advertised are no longer differentiated
C) competitors raised their prices in response to the firm's advertising
D) brand loyalty to the firm's good increased
E) quality changes make the good more attractive

Question

Quizplus · Accepted Answer

Advertising can increase brand loyalty by making consumers more committed to a particular brand, which in turn makes the demand curve more inelastic as consumers are less willing to switch to other brands regardless of price changes.

If Advertising Makes a Firm's Demand Curve More Inelastic, It