If advertising is prohibited in a differentiated product market, evidence suggests that:

Question

Quizplus · Accepted Answer

Advertising can provide valuable information to consumers in a differentiated product market, helping them to make better purchase decisions. Prohibiting advertising in such a market could lead to less information being available to consumers, making the market less efficient. This could result in decreased competition and higher prices, which could ultimately lead to lower profits for firms. Therefore, option B is the best choice.

If Advertising Is Prohibited in a Differentiated Product Market, Evidence