Answered: According to the textbook, which of the…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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According to the textbook, which of the following statements about advertising is (are) correct?

(x) In differentiated product markets that are characterized by advertising, evidence suggests that markets are more efficient in these markets than those that prohibit advertising.

(y) Defenders of advertising would argue that advertising conveys useful information to potential consumers about style, design, taste, prices, location and/or existence of new products.

(z) Critics of markets that are characterized by firms that sell "brand" name products argue that brand names encourage consumers to pay more for branded products that are not distinguishable from generic products.

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

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