Homework Help: Micro Econ

Posted by Eric on Thursday, July 29, 2010 at 5:09pm.

Budweiser, Miller and Coors, who together produce 80% of all beer consumed in the US, each spend well over $500 million a year on television advertising campaigns, promoting their beer brands. Do you think these firms would welcome congressional legislation which restricted the amount that any one firm could spend on advertising to $5 million yearly, and thereby allowed them all to reduce their costs dramatically without fear of losing ground to each other?

Micro Econ - Ms. Sue, Thursday, July 29, 2010 at 5:30pm
No. Businesses do not like legislation that curtail them. If they didn't spend so much money on advertising, it's likely that other beer manufacturers would take some of their business away from them.

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