The case against advertising includes the assertion that adv

The case against advertising includes the assertion that advertising Answers: A. decreases competition by increasing barriers to entry of new firms into an industry. B. keeps firms from spending huge sums of money to create artificial differences among goods. C. ensures high quality and efficient production. D. provides consumers with valuable information about product availability, quality, and price.

Solution

Option 1. A. decreases competition by increasing barriers to entry of new firms into an industry.

Explanation: Large companies can spend a large amount of money on advertising to create an artificial differentiation of their products. This creates an entry barrier and reduces competition in the market.