Which of the following statements about expenditures on advertising is true?

a. When a firm spends a large amount of money on advertising, advertising can be construed as a signal of quality.
b. If a firm knows its product is of low quality, it will be willing to spend large amounts of money on advertising.
c. When a firm spends a small amount of money on advertising, this signals that the quality of the good is high.

Read the following example and determine whether it illustrates a common critique or defense of advertising.

Tim sees a commercial for a Brand X clothing company that depicts the wearers of the clothes out having a good time with friends. Although he doesn't particularly need new clothes, the commercial prompts him to buy a Brand X t-shirt.

This illustrates a common_________ of advertising.
a. Crtique
b. Defense

When a manufacturer is confident of the high quality of its products, he employs sophisticated method of advertising in order to extend the uniqueness of the product to a larger circle of potential customer.

Defense of advertising argues that the basis of advertising are personal conviction based on self desires and it is totally free of the influence of government.

Advertising captures the selfish desire of a customer to satisfy his personal gratification.

aliasger2709 aliasger2709 · Answer 2 · 2021-11-26T09:37:21+01:00

Advertising is a platform through which the merchandising and publicity of labels, businesses, commodities and goods occur.

1. The correct option is:

Option C. When a firm spends a small amount of money on advertising, this signals that the quality of the good is high.

Expenditures on promotion mean economic cost spend on promotion of manufacturer, brand, merchandise and the service.

When the manufacturer is positive about the quality of his goods he uses advertising to support the uniqueness of his stocks to the consumer base without using an extensive amount of money.

2. The correct option is:

Option B. defense.

It explains that the commercials are based on the self wants of individuals and are not influenced by another entity.

Advertisement excites individual wishes to buy that product even when he is in no need of it.

To learn more about Advertisements and their effects refer to the given link:

https://brainly.com/question/12790665