Which of the Following Is True About Advertising

question 67

Multiple Choice

Which of the following is true about advertising?

• A) If monopolistically competitive firms compete through advertising, that creates brand loyalty, then advertising can be an effective entry cost.
• B) Advertising may be the only way that a new entrant can penetrate a market dominated by long-established firms.
• C) Advertising has no impact on entry costs or market structure.
• D) Both a. and b. above are correct.

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Definitions:

Accounts Payable

Short-term liabilities representing amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Factoring

A financial transaction and a type of debtor finance where a business sells its accounts receivable to a third party (the factor) at a discount.

Net Working Capital

measures a company's short-term financial health by subtracting its current liabilities from its current assets, indicating the liquidity available to fund day-to-day operations.

Accounts Receivable

Unsettled financial obligations to a corporation from its customers for products or services already delivered or engaged in, awaiting payment.