Which of the following firms has the least incentive to advertise ?
Correct answer: B. a wholesaler of crude oil
- A. a manual fracture of breakfast cereal
- B. a wholesaler of crude oil
- C. a restaurant
- D. a manufacturer of home heating and air conditioning
Explanation
A wholesaler of crude oil sells a largely standardized product to business buyers, so advertising creates little additional demand. Consumer-facing products such as cereal, restaurants, and heating systems gain more from product information and differentiation.
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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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