If 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. Would these firms 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?
Good tough question in which there is no right answer. But take a shot, what do you think.
Hint: Cigarette makers welcomed a similar restriction in 1971
Hint 2: what do you think is the price elasticity of beer?