Advertising Is Important for Products Such as Butterfinger Candy Bars

question 239

Multiple Choice

Advertising is important for products such as Butterfinger candy bars and Dasani bottled water that are purchased frequently and at relatively low cost.Also,wide distribution in retail outlets is essential.Why?

• A)They are highly sought after goods that one purchases from wholesalers.
• B)They are unsought products,so advertising promotes consumers' impulse purchases.
• C)They are nondurable goods and easily substitutable,so consumers need to be reminded of their existence.
• D)They are shopping products and can easily go out of stock.
• E)They are semidurable goods,so advertising helps to maintain steady demand.

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of earning revenue from these resources elsewhere.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources that it already owns, without directly paying for them.

Leasing

A contractual arrangement where one party (the lessor) grants another party (the lessee) the right to use an asset for a specified period in return for regular payments.

Wages Forgone

The potential earnings that are lost or given up by choosing one alternative over another, often considered in decisions about education or training.