Which of the following statements about how advertising affects price is most likely true?
A) Advertising has a strong effect on the price of agricultural products, such as soybeans.
B) Advertising always increases the price of a product.
C) The consumer who buys the product pays for the advertising.
D) Advertising has had a significant impact on the prices charged by utilities.
E) The amount typically spent on advertising is large compared with the total cost of the product.

Question

Quizplus · Accepted Answer

The cost of advertising is typically included in the overall price of a product, meaning that the consumer ultimately pays for it. However, this does not necessarily mean that advertising always increases the price of a product (option B), as other factors such as competition and production costs can also influence pricing. Options A, D, and E are not necessarily true for all products or industries.

Which of the Following Statements About How Advertising Affects Price