Which of the Following Statements Is True About the Effect

question 52

Multiple Choice

Which of the following statements is true about the effect of advertising on prices?

• A) In industries subject to government price regulation, advertising has historically had no effect on prices.
• B) Advertising affects prices of all products regardless of price regulation by the government.
• C) Advertising makes generic products costlier.
• D) Advertising often contributes to rising prices as it eliminates competition.
• E) Historically, advertising has had significant effect on prices of agricultural products.

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Definitions:

Primary Products

Basic commodities that are used as inputs by other industries for production processes, including agricultural products, minerals, and raw materials.

Developing Countries

Nations with a lower living standard, underdeveloped industrial base, and low Human Development Index (HDI) relative to other countries.

Manufactured Goods

Products that have been processed or transformed from raw materials into finished goods ready for sale.

Services

Intangible products such as healthcare, education, and entertainment that are provided to consumers.