The Wheeler-Lea Amendment in 1938 Greatly Influenced the Future of Advertising

question 16

Multiple Choice

The Wheeler-Lea Amendment in 1938 greatly influenced the future of advertising in America by

• A)establishing the powerful Federal Trade Commission (FTC).
• B)allowing the FTC to stop practices that were misleading regardless of their impact on competition.
• C)granting industries the right to form self-regulatory organizations to reduce FTC interference.
• D)reducing FTC control over advertising practices regarding competition and monopoly.

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Definitions:

Output

The quantity of goods or services produced within a given time period by a firm, sector, or economy.

U-Shaped Marginal Cost

A graphical representation of the cost incurred to produce one more unit of a good, which decreases at first due to increasing returns but eventually increases due to decreasing returns.

Profit-Maximizing Output

The quantity of output at which a firm achieves the maximum possible profit, determined where marginal revenue equals marginal cost.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.