Firm A produces and sells in a market that is characterized by highly differentiated consumer goods.Firm B produces and sells industrial products.Firm C produces and sells an agricultural commodity.Which firm is likely to spend the greatest portion of its total revenue on advertising

Question

Quizplus · Accepted Answer

Firm A operates in a market characterized by highly differentiated consumer goods. Therefore, it is likely to face intense competition and spend a significant portion of its total revenue on advertising to differentiate its products from competitors and attract customers. On the other hand, Firms B and C are likely to have a lower advertising expenditure since they operate in industrial and agricultural sectors, respectively, where advertising may be less influential in attracting customers.

Firm a Produces and Sells in a Market That Is