Spending a lot on advertising is a credible signal because it:
A) conveys the firm's confidence in the high quality of their product.
B) persuades the consumer to perceive high quality of a product, even if it doesn't exist.
C) conveys the firm's confidence in its ability to convince the consumer to buy.
D) None of these explains why advertising can be a credible signal.
Correct Answer:
Verified
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