Question

Which of the following statements about brand names is true?

Answer 1

Answer:

Which of the following statements about brand names is true?

• 1. Brand names give the seller an incentive to provide consistently high-quality products and services in order to protect the reputation of the brand.

Options 2 and 3 are wrong:

2. Brand names are always economically wasteful since they dupe consumers into buying more expensive goods and services that are no different from generic versions.  

⇒ FALSE, just because a product has a certain brand it doesn't make it better and therefore more expensive. There are brands that consumers associate with luxury and expensive products, while there are other brands that consumers recognize while not necessarily being more expensive than others, e.g Coke.  

3. It is always rational to prefer brand names over generic substitutes.

⇒ FALSE, it depends on the type of product. Generic medicines as just as effective as banded medicines.

Read the following example and determine whether it illustrates a common critique or defense of advertising.

• This illustrates a common CRITIQUE of advertising. This ad targets young people that are susceptible to believing exaggerated or materialistic aspects of a product that cannot be proven correct or wrong.