If Signalling Is Applied to Advertising

question 84

Multiple Choice

If signalling is applied to advertising:

• A)a firm with a good product reaps a relatively small benefit from advertising
• B)firms recognise the possibility of repeated customers
• C)it is irrational for a firm with a good product to pay for the cost of the signal
• D)all firms have the same incentive to advertise

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Definitions:

Incomes

Refers to money received, especially on a regular basis, for work or through investments.

Capital Flight

The rapid movement of large sums of money or assets out of a country due to economic or political instability.

Industrial Advanced Countries (IACs)

Countries characterized by high levels of industrialization, technological advancement, and economic development.

Skilled Workers

Employees who have specialized training, expertise, or qualifications that allow them to perform complex job tasks.