Question

The LookGood BePopular (LGBP) Clothing Company embarked on a new advertising campaign in which a group of young beautiful people are having fun eating out at a restaurant wearing the company's clothes. Critics of advertising argue that this advertisement
a. causes demand for LGBP Clothing to be less elastic.
b. is more effective than other forms of advertisement because of its content.
c. will cause the market to be more competitive.
d. Both a and b are correct.

Answer 1

Answer:

The correct answer is the option A: causes demand for LGBP Clothing to be less elastic.

Explanation:

To begin with, due to the fact that the content shown in the advertisement tends to be pretty good due to the people having fun with the company's clothes then the customers will picture themself in that same situation wearing the clothes of the firm, therefore that they will tend to buy more products of the company and by doing that the price elasticity of demand will decrease due to the fact that now the goods will be more needed by the people due to the advertisiment.