For 18 Months,Warner-Lambert Co

question 345

Multiple Choice

For 18 months,Warner-Lambert Co.was required to include the following statement in all television advertisements for Listerine: "Listerine will not help prevent colds or sore throats or lessen their severity." The FTC imposed this requirement because previous advertising had caused consumers to believe Listerine was effective against colds.This is an example of the FTC action of

• A)corrective advertising.
• B)deceptive advertising.
• C)unethical advertising.
• D)cease-and-desist advertising.
• E)self-regulation.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and the business is not making a profit but is also not losing money.

Variable Costs

Costs that vary depending on how much is produced or sold.

Break-Even Point

The production level or sales volume at which total revenues equal total expenses, resulting in no net loss or gain.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing to covering fixed costs and generating profit.