Regarding PROMOTION BUDGETS and PROMOTION BLENDS:
A) A national TV ad might cost less per person reached than a local TV ad.
B) The total cost of mass media may force small firms to use promotion alternatives that are more expensive per person.
C) A city-wide newspaper ad might cost less per person reached than a neighborhood newspaper ad.
D) There are some economies of scale in promotion.
E) All of these are good answers.

Question

Quizplus · Accepted Answer

All the options provided illustrate principles related to economies of scale in promotion and the relative costs of reaching individuals through different advertising mediums. National TV ads and city-wide newspaper ads can benefit from economies of scale, making the cost per person reached lower than more localized advertising options. Small firms might have to opt for more expensive per person promotion alternatives due to the high total cost of mass media advertising.