Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money advertising products that have which of the following

Question

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Advertising is often used to create a perception of quality where there may be none or where there may be inferior quality. Profit-maximizing firms would not spend money advertising products that have superior quality, as these products would sell well on their own merits. Similarly, advertising products with low prices or limited availability may not make sense, as these products could be sold at a discount or through targeted promotions. However, firms may spend money on advertising products with mediocre or inferior quality in order to boost sales and generate higher profits.

Defenders of Advertising Argue That It Is Not Rational for Profit-Maximizing