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7 January, 08:31

How does advertising affect demand? (with example)

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  1. 7 January, 09:23
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    Advertising increases aggregate demand

    Explanation:

    If a store is selling some candy, no-one will know about the candy if they aren't told. If a child sees an advert about that candy and gets interested, he/she would beg their parents to get it for them. If 80 out of a population of 100 children see the advert and half of the them are allowed to buy the candy, the demand for that candy has already risen by nearly 50% of the children in that area.
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