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Practice Exam Questions

Advertising, Costs and Revenues (MCQ Revision Question)

Level:
A-Level, IB Diploma
Board:
AQA, Edexcel, Eduqas, IB, OCR, WJEC

Last updated 21 Jan 2018

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In this MCQ revision question we revise the likely effects on cost and revenues of a successful advertising campaign for a firm operating in an imperfectly competitive market.

Advertising, Costs and Revenues (MCQ Revision Question)

Key points in reasoning the correct answer:

  • Successful advertising causes outward shift in both AR & MR
  • Advertising is usually treated as a fixed cost
  • Rise in fixed cost causes upward shift in the AC curve but no change in the MC curve
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