Question

Firms pay famous individuals to endorse their products because

A. apparently demand is affected not just by the number of people who use a product but also by the type of person that uses the product. '
B. famous people only consume high quality products.
C. famous people obviously know what are the best goods and services.
D. the firms are irrational and are wasting advertising expenditures.

Answer 1

Answer:

The correct answer is letter "A": apparently demand is affected not just by the number of people who use a product but also by the type of person that uses the product.

Explanation:

Demand is defined as the requests of good or services individuals make to satisfy their needs. Usually, demand is related to price while determining the fluctuations in the quantity demanded for a given product. However, price is not the only factor that impacts demand.  

Consumer preferences, income, and expectations, advertisements, and the number of consumers in the market also determine the demand for commodities.