Practice Exam Questions
Advertising, Costs and Revenues (MCQ Revision Question)
- Level:
- A-Level, IB
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 21 Jan 2018
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.
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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