Jonathan Baker is a market analyst. He works at a firm that is one of the few pr
ID: 1222748 • Letter: J
Question
Jonathan Baker is a market analyst. He works at a firm that is one of the few producers of good X. Jonathan formulates a hypothesis that an increase in advertising will increase the demand for this firm's products by attracting new customers. Which of the following, if true, would suggest that Jonathan's hypothesis will hold? A. Other firms will respond by increasing their own advertising. B. All rival firms have a higher market share. C. Import restrictions are preventing firms from achieving productive efficiency. D. According to research reports, consumer choices remain unchanged in the short run. E. Even brand-loyal consumers can be convinced to change their preferences.
Explanation / Answer
Answer:
Jonathan Baker is a market analyst. He works at a firm that is one of the few producers of good X. Jonathan formulates a hypothesis that an increase in advertising will increase the demand for this firm's products by attracting new customers. Which of the following, if true, would suggest that Jonathan's hypothesis will hold?
E. Even brand-loyal consumers can be convinced to change their preferences.
Explanation:
An increase in advertising will increase the demand for firm’s products by attracting new customers. It is true; Why because during the advertising, the loyal consumers also convince to change their preferences. So Jonathan Baker could hold same situation in the above options.
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