Advertising Signals Coursework Example | Topics and Well Written Essays - 500 words

Advertising Signals - Coursework Example There is a lot of information that is being provided to the viewers of the ad through one single advertisement. At first glance, the viewers might say that a very low amount of information is being provided through this advertisement. Those who are in favour of such adverts might defend advertisements and state that all advertisements have some kind of information and even the most poorly constructed advertisements have some information about the quality of the product being advertised. Advertisements are very important signals about the quality of the product, an advertisement that costs really high provides clear information to the consumers that the product being advertised is of very high quality and that is why so much money is being spend on advertising the product. Body An Example of how advertisement signals quality: Two companies, company A and company B, selling cereal has developed and launched their own cereals for breakfast and they plan to sell it for $5 per container o f cereal. Considering that the marginal cost incurred by both the cereal producers is $0, this means that each container of cereal sold by these companies will earn them $5 in profit.