Which of the Following Statements Regarding Brand Names in Advertising

question 297

Multiple Choice

Which of the following statements regarding brand names in advertising is not correct?

• A)Brand names provide consumers with information about quality when quality cannot be easily judged in advance of purchase.
• B)Brand names give firms an incentive to maintain high quality to maintain the reputation of the firm.
• C)Brand names allow firms to produce and sell inferior products in the long run since people will continue to purchase the brand-name product.
• D)Brand names can cause consumers to perceive differences in products that do not actually exist.

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Definitions:

Dividend Payout

The portion of a company's earnings that is distributed to shareholders in the form of dividends, usually expressed as a percentage of the earnings.

Lower Volatility

Refers to the characteristic of an asset or portfolio to experience less fluctuation in price over time.

Intrinsic Value

The actual value of a company or asset based on underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.

Time Value

The principle that the value of money changes over time due to its potential earning capacity, impacting investment decisions.