How does advertising influence people’s purchases?
Same advertisements can either increase or decrease prices paid for selected brands, depending on the degree to which the choice situation requires brands to be recalled in order to be considered. [ However, an increase in prices paid caused by advertising does not necessarily imply detrimental effects on consumer welfare.
Even under circumstances in which differentiating advertising leads
consumers to select brands with higher average prices, it can provide useful information to consumers that allows them to make purchases that are more in line with their personal tastes than are the choices of consumers not exposed to the advertisements.. ]
Expert answered|ambrosio_09|Points 100|
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