Information Advertising Might Provide Information About Prices in Stores, or It

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The Answer is When the information conveyed is about prices, the advertising makes consumers aware of where products are sold at what prices -- thus increasing competition and decreasing any ability to price above marginal cost. When the information conveyed is about product characteristics, the aim might be to differentiate the product so as to gain some market power. The former is therefore more likely to be efficient, but the latter can be efficiency enhancing as well if the surplus generated by the product characteristics outweighs the deadweight loss from market power being exercised.

Information Advertising Might Provide Information About Prices in Stores, or It

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Correct Answer:
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Information Advertising Might Provide Information About Prices in Stores, or It

Essay

Correct Answer:VerifiedShow Answer

Correct Answer:
Verified