Question

Spending a lot on advertising is a credible signal because it: Multiple Choice O conveys the firm's confidence in its ability to convince the consumer to sell O conveys the firm's confidence in the high quality of their product (C) None of these explains why advertising can be a credible signal O persuades the consumer to perceive low quality of a product, even if it doesn't exist < Prey 46 of 55 !!! Next >

Answer 1

Spending a lot in advertising is a credible signal because it conveys the firm's confidence in the high quality of their product.

An ongoing marketing of a product helps in building reputation of a brand name and also build people's confidence on the product. Advertisement convinces people about the product's quality on continuous basis. It also helps in increasing customer base.