If Mary wants to use advertising to reduce the elasticity of demand for her dry cleaning services, she should make sure the advertising:
a. clearly states the prices she charges.
b. shows that she is producing a product like the other dry cleaners in town.
c. shows why her services are truly different from the other dry cleaners in town.
d. does none of the above.
QUESTION 2To make agreements that create value and can be enforced, the parties' underlying rights must be clearly defined in the contract.
Indicate whether the statement is true or false
QUESTION 3Which of the following statements is incorrect?
a. Advertising can lower the costs to consumers of acquiring information.
b. Advertising tends to increase competition in imperfectly competitive industries.
c. Even though advertising increases total production costs, it may indeed provide a useful service to consumers.
d. Advertising is only useful as a way to manipulate consumer tastes.
QUESTION 4If the costs of negotiating and enforcing contracts are high relative to the benefits, buyers and sellers will have incentives to make economically efficient arrangements that increase value.
Indicate whether the statement is true or false
QUESTION 5In monopolistically competitive markets, advertising is an ____ type of non-price competition because it is used to ____ the demand for a firm's products.
a. important; increase
b. unimportant; increase
c. important; decrease
d. unimportant; decrease
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