Which Statement Is TRUE

question 103

Multiple Choice

Which statement is TRUE?

• A) Import restrictions may be the best policy if production in certain industries generates positive spillover effects to other industries.
• B) It is usually easy to identify industries that generate positive spillover effects.
• C) It would be more efficient to subsidize industries that generate positive spillover effects than to implement import restrictions.
• D) Spillover effects from Silicon Valley were the biggest factor leading to increases in productivity in the 1990s.

Analyze how monopolistically competitive firms use advertising to influence demand elasticity and market power.

Examine the external effects of new entrants on existing firms and consumers in monopolistically competitive markets.

Understand the relationship between advertising and consumer behavior in the context of market competition.

Analyze the impact of product quality and advertising on market share and profitability.

---

Definitions:

Market Segments

Divisions within a market that are identified by specific needs and characteristics, allowing for targeted marketing strategies.

Profit

The money left after a for-profit organization subtracts its total expenses from its total revenues and is the reward for the risk it undertakes in marketing its offerings.

ROI

Return on Investment, a financial metric used to measure the efficiency and profitability of an investment.

Demographic Segmentation

The segmentation of a market into different groups according to factors like age, gender, income, occupation, and education levels.