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If the dairy association starts a highly successful advertisement campaign that makes people want to drink milk. What would happen?
a) the quantity demand for milk increases.
b) demand for milk increases
c) the demand of milk decreases because the price of milk rises
d) demand for milk is not effected
e) The price of milk falls to encourage people to drink more
The phrasing of the question is odd: if you're starting a campaign, how do you know it's highly successful?
Assume it's just a badly written question: answer is B
el tib
B is the immediate answer....but a "highly successful" ad campaign would lead to people not only buying more milk regardless of the price, but the competitors demand would also decrease, and the highly successful part would come in after the profit from the milk has passed the cost of the advertising campaign.
T.J.
It's a trick question... Answer is d
If the dairy association STARTS an ad campaign it will not know it was "highly successful" unless (b) is achieved through measurable results. The only way to analyze measurable results is AFTER the campaign has ran and if in fact demand increased.
-- This is from the mind of a marketer, not an economist ;-) --
BUT if we were to throw that out for a second and be very simple about it... then B is the correct answer.
Nightwish
ummm .....B I think.
jimnel
B
Marvinator
Basically, only B. The quantity demand has nothing to do with the desire to drink milk, so merely an increase in milk consumtion is seen.
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