Many economists argue that advertising can have a detrimental effect on competition by:
A) creating barriers to entry that results in less competition and higher prices
B) allowing unfair comparative advertising
C) minimizing the importance of pricing and distribution strategy
D) lessening the importance of good budgeting strategies

Question

Quizplus · Accepted Answer

Advertising can be very expensive, which means that only larger firms can afford it. This creates barriers to entry and makes it more difficult for small firms to compete. As a result, there are fewer firms in the market, which in turn leads to higher prices.

Many Economists Argue That Advertising Can Have a Detrimental Effect