Discussion on advertising costs and economic efficiency

Reference no: EM1376199

Advertising can inform purchaser, but sellers must incur expenses to advertise. If so, advertising can result in higher prices to customers. Does this mean advertising is economically inefficient? If not, explain how it can simultaneously create value
and increase market prices.

Following are observations on the market price and the quantity of good X produced and consumed in three different years: $10 and 100 units, $4 and 57 units, and $8 and 88 units. Can we conclude that the market demand for X slopes upward?

Reference no: EM1376199

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