When marketing makes customers better informed about all firms in the market:
A) demand curves for specific brands in the market are likely to become less elastic.
B) each firm is likely to have less market power.
C) firms are better able to foster stronger brand loyalty.
D) the market power of individual firms is strengthened.

Question

Quizplus · Accepted Answer

When customers are better informed about all firms in the market, it allows them to make more informed choices and reduces the level of asymmetry in the market. As a result, each firm is less likely to have a dominant position or market power. This can lead to a more competitive market and can limit the ability of firms to establish strong brand loyalty or differentiate their products. As a result, demand curves for specific brands in the market are likely to become more elastic.

When Marketing Makes Customers Better Informed About All Firms in the Market