The view that advertising serves as a source of information suggests that advertising is:
A)a low-cost way of providing information on price and quality of products and making markets work better.
B)a way of creating artificial product differentiation that induces consumers to buy products they really do not demand.
C)effective only when it is used by monopolists.
D)beneficial to consumers but adds to a firm's irrecoverable costs of production.

Question

Quizplus · Accepted Answer

The view that advertising serves as a source of information suggests that advertising is a low-cost way of providing information on price and quality of products, which can make markets work better by helping consumers make informed choices. This view is often supported by the argument that advertising helps to reduce search costs for consumers, enabling them to identify and compare the characteristics of different products more easily.

The View That Advertising Serves as a Source of Information