Which of the following is not put forth as a criticism of advertising and brand names ?
Correct answer: B. Advertising increase competition Which causes unnecessary bankruptcies and layoffs.
- A. Advertising manipulates people's tastes to create a desire that otherwise would not exist
- B. Advertising increase competition Which causes unnecessary bankruptcies and layoffs.
- C. Advertising increases brand loyalty causes demand to be more inelastic and thus, increase mark-up over marginal cost.
- D. All of these answers are criticisms of advertising and brand names
Explanation
The standard criticisms are that advertising manipulates preferences and that brand loyalty makes demand less elastic, allowing higher mark-ups. The claim that advertising increases competition and thereby causes unnecessary bankruptcies and layoffs is not a usual criticism in this framework.
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