Which of the following is NOT an argument economists make in favour of advertising?
Correct answerA. Advertising provides a creative outlet for artists and writers
Explanation
The economic case for advertising is that it informs consumers and helps new firms compete, which strengthens competition; giving artists work is not an efficiency argument.
Correct answerD. Since price is above marginal cost, some units that buyers value in excess of their cost of production are not produced, causing a deadweight loss
Discussion