Principles of Microeconomics / Unit 9 MIC 0813 short lesson, about 20 seconds
Advertising in the Model
Captions available
The idea
Advertising does two things to a firm's demand curve: shifts it right, so more sells at each price, or makes it less elastic, so price can rise with fewer lost customers.
In practice
Loyalty steepens the curve; announcing a new shop shifts it.
Where people slip
Advertising is a cost too; it pays only if the revenue it adds exceeds its cost.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Something wrong in this lesson? Flag it