When Is a Signal Informative

question 18

Multiple Choice

When is a signal informative?

• A)When it is lightly advertised by the firm
• B)When it is more profitable for the high quality firm to offer it
• C)When there are many firms advertising substitute products
• D)When it is offered by the low quality firm
• E)When the first firm that signals is the low quality firm

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Definitions:

Cost Of Goods Sold

Costs that are directly incurred in the process of producing goods for sale by a company, such as labor and material expenses.

Selling And Administrative Expenses

Costs incurred by a company that are not directly tied to a specific product or service's production but are necessary for running the business.

Financial Planning

The process of outlining how a business or individual will manage their finances to meet goals and objectives, involving budgeting, investments, retirement planning, and tax strategies.

Contingency Plans

strategies developed to mitigate the impact of unexpected events or emergencies.