Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 14, Problem 19P
How does advertising intend to shift
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- In which type of market, monopolistic or competitive market, is the equilibrium market price lower? Why?arrow_forwardHow do companies make long-run pricing decisions?arrow_forwardIf you want to increase demand for your restaurantbut are unable to lower prices or increase advertising,what steps might you take?arrow_forward
- In the world of French high cuisine, a three-star rating from the Michelin Red Guide is a widely accepted indicator of gastronomic excellence. French consumers consider Gault Milleau, another restaurant guide, not as authoritative as the Michelin guide because Gault Milleau, unlike Michelin, accepts advertising and its critics accept free meals. Why are guides' ratings important to restaurant owners and chefs? Discuss the effect of a restaurant's rating on the demand for the restaurant. a. A) It provides information to consumers regarding the restaurant's quality, thus, reducing the moral hazard problem. A high rating can increase demand B)It provides information to consumers regarding the restaurant's quality, thus, reducing the adverse selection problem. A high rating can increase demand. b. Why do advertising and free meals taint the credibility of Gault Milleau? Discuss the moral hazard problem of Gault Milleau's ratings. A) The critics may be biased toward restaurants that give…arrow_forwardIf a company successfully advertises its product, do we expect the price elasticity of demand for this firms perceived demand curved to increase, decrease or remain the same? Explain how advertising can cause this effect.arrow_forwardWhat is the reason that Wholesalers are the most misunderstood of marketing intermediaries?arrow_forward
- Write notes on Penetrating pricing.arrow_forwardMIcro: The company “Mike Broonie” operates in the market of monopolistic competition. Just now, the company weekly produces and sells 100 units of pillows for £12 each. The average total cost to produce the pillows doesn’t depend on the output, being £10 per unit. Having evaluated the price elasticity of demand for its product, the company concluded that demand is inelastic at the moment. a. What indicator characterizes the price elasticity of demand? What formula (or formulas) one can use to calculate this indicator? Choose any number for this indicator that, under the conditions specified in the case, could characterize the price elasticity of demand for the company “Mike Broonie”. b. Imagine that the owner of the company wants to increase the price of the company’s product. How will it affect sales, revenue, and profit (will each of these indicators increase, decrease, or remain the same)? Give here theoretically substantiated forecast. To increase the number of points…arrow_forwardOutline the economic factors that affect marketing decisions and consumer buying power.arrow_forward
- Which of the following gives the customers better products that are not offered by other competitors? Select one: a. Competitive advantage b. Branding c. Advertisements d. Marketing Strategyarrow_forwardAnswer to Q?arrow_forwardList and explain the three kinds of pricing methods. Give an advantage and a disadvantage for each method.arrow_forward
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