Which of the Following Is Not True About Advertising

question 76

Multiple Choice

Which of the following is not true about advertising?

• A)It creates brand loyalty.
• B)It is a form of nonprice competition.
• C)It results in efficient allocation of resources.

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Definitions:

Entry Barriers

Obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, and established brand loyalty.

Competitive Price-searcher Market

A market structure where firms have some control over the pricing of their products because their products are differentiated, but there is intense competition due to low entry barriers.

Economic Profit

The total revenue of a business minus both explicit and implicit costs.

Long-run Equilibrium

A state in which all firms in a market are making normal profits, with no incentive for entry or exit, indicating a stable market condition.