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Juliette [100K]
2 years ago
5

Esme Inc., a manufacturer of cosmetics, ran an ad campaign in which it claimed that Esme's "Vivid" range of water-proof mascara

is the best mascara in the world. It also claimed that the mascara gives 10 times more volume to the eyelashes and provides more definition to the eyes than any other mascara brand. This scenario is an illustration of ________. A) deception.B) superlative advertising.C) unfairness.D) puffery.E) unethical advertising.
Business
2 answers:
kondaur [170]2 years ago
8 0

Answer:

D) puffery

Explanation:

In advertising, puffery refers to promoting a product or services using broadly exaggerated statements or testimonials.

They are legal because they are based on subjective terms (opinions) and not objective terms (measurable facts). E.g. the statement "most delicious steak in the world" cannot be proven wrong because no one can show that their steak is the most delicious.

When you say some product is the best in the world, in order for it o be considered false advertising, you must promise something that is measurable, e.g. you cannot promise a car has the best mileage per gallon in the world if it doesn't because that can be measured.

Instead eyelash volume or definition is not something that can be measured scientifically, you can notice a change but that it basically an opinion. There is no scientific measure of eyelash volume or definition.

In order for puffery to be legal, it must be so exaggerated that any reasonable person should realize it is not possible or extremely unlikely to be true, at least for everyone.

Pie2 years ago
6 0

Answer:

The answer is D. Puffery.

Explanation: When an advertisement is being made, certain boastful and exaggerated claims can be made by a company about the superiority and uniqueness of their product.

This claim is termed as Puffery.

Puffery is defined as advertising or promotional content that makes exaggerated or boastful statements about a product or service that are based on opinion rather than something that can be measured.

Puffery in advertising is done based on the chance that no reasonable person would presume the exaggeration to be literally true.

This is what Esme Inc. has done by claiming that its mascara is the best in the world, and also gives ten times more volume to the eyelashes. This is an exaggerated claim.

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An entrepreneur needs to raise $20,000 for improvements to her factory. She plans to contribute 60 percent of this sum from her
Karolina [17]

Answer:

$8,000

Explanation:

The entrepreneur needs $20,000. She can raise 60% from savings. It means she needs to generate 40% from other sources.

40% of $20,000 is

=40/100 x $20,000

=0.4 x $20,000

=$8,000

8 0
3 years ago
Explain the four basic elements of all economic systems.
Alekssandra [29.7K]

Answer: They are personal consumption, business investment, government spending, and net exports.

Explanation:

6 0
3 years ago
Suppose that the European Union is now experiencing a recession. Its actual real GDP is €200 billion, and the estimate of its po
jek_recluse [69]

Answer and Explanation:

As per the data given in the question,

The central bank have various tools to apply expansionary policy and these tools are :

- Reserve ratio.

- Discount rate.

- Open market operations.

The open market operations include the buying and selling of government owned securities by central bank to impact the monetary base in the economy. In case of any recession, the central bank should purchase government securities to enhance the money supply. Because whenever they do any kind of open market purchase there would definitely be increase in money in the economy. That's why increment in money supply decrease the interest rate in economy.

Nominal interest rate is the cost of borrowing so if there is decrement in interest rate, there would be consumption and investment activities. these both are the component of aggregate demand so the aggregate demand will increase, and this increment in aggregate demand helps the economy to recover in the situation of recession.

6 0
3 years ago
Linda decides to open a kiosk in the mall selling baseball hats. It costs her $2280 to stock 100 hats and $3580 to stock 500 hat
Liula [17]

Answer with Explanation:

1. Marginal Cost per Unit

As we know:

Marginal Cost per Unit = Change in Cost / Change in Quantity Bought

= ($3580 - $2280) / (500 - 100)

= $3.25 per Unit

2. Fixed Cost to setup

The fixed cost would be $2280 because it is the cost that is required for setting up the kiosk. The cost $3580 is not relevant because it depends on the demand of the product. The least cost to set up kiosk is $2280.

3. Cost Function

Total Cost = Fixed Cost + Variable Cost

As we know that:

Variable Cost = Marginal cost per unit * Number of units = $3.25 * x = 3.25x

For Fixed cost $2280

By putting this value in the above equation, we have:

Total Cost = $2280 + 3.25x

C(x) = $2280 + 3.25x

And

For Fixed cost $3580

C(x) = $3580 + 3.25x

4. Revenue Function

Total Revenue = Selling Price per Unit  *  Total Units

Here

Selling price is $8 and total units are "x"

By putting values, we have:

Total Revenue = $8 * x

R(x) = 8x

5. Breakeven Point For $2280 and $3580

As we know that

Breakeven Point = Fixed Cost / Contribution Per unit

For Fixed Cost $2280:

Breakeven Point = $2280 / ($8 - $3.25)

= 480 Units

For Fixed Cost $2280:

Breakeven Point = $3580 / ($8 - $3.25)

= 754 Units

6. Profit Function

For Fixed Cost $2280:

Profit = Revenue Function - Cost Function

P(x) = 8x  -  ($2280 + 3.25x)

P(x) = 8x - $2280 - 3.25x

P(x) = 4.75x - $2280

For Fixed Cost $3580:

P(x) = 4.75x - $3580

7. Claire's Profit if she sells 1,000 bottles

Using the above profit function for fixed cost $2280, we have:

P(x) = 4.75x - $2280

Here x is 1,000 units, which means:

P(x) = 4.75 * 1,000   -   $2280

P(x) = $4,750 - $2280 = $2,470

Using the above profit function for fixed cost $3,580, we have:

P(x) = 4.75x - $3,580

Here x is 1,000 units, which means:

P(x) = 4.75 * 1,000   -   $3,580

P(x) = $4,750 - $3,580 = $1,170

5 0
3 years ago
Frankenstein Electric has a capital structure that consists of 60 percent equity and 40 percent debt. The company's long-term bo
Alexeev081 [22]

Answer:

Kd = 7%

Ke =      D1      +  g

        Po(1 - FC)

Ke =      $2            + 0.09

        $40(1 - 0.15)

Ke =       $2      +  0.09

              $34

Ke = 0.1488 = 14.88%

WACC = Ke(E/V) + Kd(D/V)(1-T)

WACC = 14.88(60/100) + 7(40/100)(1 - 0.40)

WACC = 8.928 + 1.68

WACC = 10.6%

Explanation:

In this case before-tax cost of debt is given. Cost of equity is expected dividend divided by current market price after flotation cost plus growth rate. WACC is calculated as cost of equity multiplied by the proportion of equity in the capital structure plus after-tax cost of debt multiplied by proportion of debt in the capital structure.

8 0
3 years ago
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