Question

Advertising increases the price of products for consumers. Give tworeasons either for or against.
of a product.
​

Answer 1

Answer:

No, I do not agree with with the above statement. Advertising stimulates demand which facilitates large-scale production of goods and services, resulting in economies of large-scale production. As a result, there is widespread availability of goods and services at economical prices. For example, the prices of electronic items get reduced because of widespread demand.

Answer 2

Answer:

Advertising is a method of communicating with product or service users. Advertisements are messages that are paid for by the senders and are intended to inform or influence those who receive them.

Advertisement may or may not increase the price of the product for the consumer. It is discussed below in detail.

Explanation:

Reasons that advertisement increases the price of the products for the consumer-

• Confuses Buyers: Advertising frequently depicts a distorted version of reality. Consumers who believe in advertising purchase the product. He feels cheated by its use. Later, he realises that the information in the advertisement was incorrect, and the actual product was quite different. As a result of the incorrect presentation, people lose faith in advertising. It is said in this context that advertising confuses rather than helps.
• Increases Costs: A company must spend a lot of money on advertising. It raises the price of the products. To cover this cost, the product's price is raised. No manufacturer pays for advertising costs out of his own pocket. As a result of advertising, prices rise unnecessarily. It is stated in this context that advertising costs are passed on to consumers in the form of high prices.

Reasons that advertisement does not increase the price of the products for the consumer-

• It does not confuse buyers: While it is true that advertisements can sometimes distort reality, buyers are rational beings who will only purchase a product after thoroughly evaluating all aspects of it. However, if they do not have any information, they can obtain it from the seller. As a result, it is incorrect to claim that advertising confuses buyers.
• It does not raise costs: It is commonly assumed that advertising raises costs unnecessarily. However, the reality is that advertising raises the demand for a product, which raises the production scale. Large production results in significant cost savings.

Hence, we can conclude that advertisement at a point confuses the buyer while this confusion can be solved by getting proper information about the product.

Also, a theory says that the due to the advertisement cost the price of the product increases while on the other hand, due the advertisement the demand of the product increases which overcomes the extra advertisement cost.

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