A Firm with a Very Good Product

question 368

Multiple Choice

A firm with a very good product

• A)has a higher cost of signaling (advertising) than does a firm with an inferior product.
• B)has more to gain by signaling (advertising) than does a firm with an inferior product.
• C)does not need to signal (advertise) because the product's quality speaks for itself.
• D)will signal (advertise) effectively if signaling is free.

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Definitions:

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