From an economic perspective,advertising might lower the cost of a product by:

Question

Quizplus · Accepted Answer

By expanding sales volume through advertising, firms can increase their economies of scale, which ultimately lowers the cost of production per unit. This is because fixed costs are spread out over a larger number of units, thus reducing the average cost of production. Additionally, advertising allows firms to reach a larger audience and potentially increase their market share, which can further drive down costs through increased bargaining power with suppliers and distributors. Choice A is incorrect as creating barriers to entry does not necessarily lower the cost of a product. Choice B is incorrect as while advertising can influence consumer behavior, it does not directly lower the cost of a product. Choice D is incorrect as advertising at high levels alongside competitors does not necessarily result in lower costs for a product.

From an Economic Perspective,advertising Might Lower the Cost of a Product