One of the side effects of advertising is that it________________?
Correct answer: B. creates artificial demands
- A. supplies the real needs of people
- B. creates artificial demands
- C. helps the wealthy get richer
- D. none of the above
Explanation
Advertising can influence preferences and persuade consumers to want products beyond their basic needs, creating artificial or induced demand. It does not merely satisfy pre-existing real needs.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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