6 . The. role. of brand names and advertising which of the following statements about expenditures on advertising is true? 0 when a rm spends a small amount of money on advertising. this signals that the quality ofthe good is high. 0 Ifa rm knows its product is of low quality, it will be willing to spend large amounts of money on advertising. 0 when a rm spends a large amount of money on advertising, advertising can be construed as a signal of quality. Read the following example and determine whether it illustrates a common critique or defense of advertising. Nick sees a commercial for a Brand X clothing company that depicts the wearers ofthe clothes out having a good time with friends. Although he doesn't particularly need new clothes. the commercial prompts him to buy a Brand X tshirt. This illustrates a common 7 of advertising