Micro

• How does advertising impact consumer welfare?

  It can inform and persuade consumers
• What is a barrier to entry in an industry?

  Obstacles preventing new firms from entering
• What is the relationship between advertising and industry concentration?

  Higher advertising can lead to greater concentration
• What does the term 'free rider problem' refer to?

  Consumers benefit without paying for ads
• How does advertising affect demand elasticity?

  Advertising can make demand more inelastic
• What is the Dorfman-Steiner condition?

  It relates advertising expenditure to demand elasticity
• What does the term 'inelastic demand' mean in advertising?

  Demand changes little with price changes
• What is the formula for advertising expenditure?

  Adexp = advertising elasticity × price elasticity
• What is the role of advertising in signaling quality?

  Ads indicate product quality to consumers
• How do search goods differ from experience goods?

  Search goods are evaluated before purchase
• What is the significance of brand preferences in advertising?

  They influence consumer choices and loyalty
• What does 'homogenous product' mean in advertising context?

  Products that are identical across firms
• How does advertising create perceived value?

  It enhances consumer perception of a brand
• What is the impact of high advertising costs on market entry?

  High costs can deter new firms from entering
• What is the relationship between advertising and repeat business?

  Effective ads can lead to repeat purchases
• What does 'marginal cost' refer to in advertising?

  Cost of producing one additional unit
• How does advertising signal quality to consumers?

  High advertising suggests higher product quality
• What assumptions are made about quality in advertising?

  Higher ads indicate higher product quality
• What is the effect of advertising on consumer knowledge?

  Ads increase consumer awareness of products
• What is the role of advertising in competitive markets?

  It helps firms differentiate their products
• How does advertising influence consumer preferences?

  It shapes and alters consumer preferences
• What is the significance of advertising in a monopoly?

  It can reinforce brand loyalty and market power
• What does 'sunk cost' mean in advertising?

  Costs that cannot be recovered once spent
• How does advertising affect consumer behavior?

  It influences purchasing decisions and preferences
• What is the relationship between advertising and market dynamics?

  Advertising can shift market dynamics and competition
• What is the impact of advertising on brand equity?

  It enhances brand recognition and loyalty
• What is the purpose of persuasive advertising?

  To influence consumer attitudes and behaviors
• How does advertising contribute to market segmentation?

  It targets specific consumer groups effectively
• What are the implications of advertising on consumer trust?

  Effective ads can build consumer trust over time
• What is the role of digital advertising?

  To reach consumers through online platforms
• How does print advertising differ from digital advertising?

  Print is physical, while digital is online
• What is the purpose of radio advertising?

  To reach audiences through audio messages
• What is the significance of out-of-home advertising?

  It targets consumers in public spaces
• How does advertising affect market competition?

  It can intensify competition among firms
• What is the relationship between advertising and consumer loyalty?

  Effective advertising can enhance consumer loyalty
• What is the impact of advertising on pricing strategies?

  It can influence how products are priced
• How does advertising create brand awareness?

  It promotes recognition of a brand among consumers
• What are the long-term effects of advertising on consumer behavior?

  It can shape preferences and brand loyalty
• What is the role of advertising in economic growth?

  It stimulates demand and drives consumption
• How does advertising affect consumer perceptions of value?

  It can enhance perceived value of products