7. The precise effect of advertising on consumer decisions is difficult to evaluate. The magnitude of advertising by profit-seeking business firms is strong evidence that it influences consumer decisions. Advertising often reduces the amount of time consumers must spend looking for a product and helps them make more informed choices.

However, a sizable share of all advertising expenditures is for largely noninformational messages. Although this is a controversial area, it is clearly much easier to point out the shortcomings of advertising than to devise an alternative that would not have similar imperfections.