CENGAGE | MINDTAP odule Six Quiz 6 . The role of brand names and advertising Which of the following statements about expenditures on advertising is true? O If a firm knows its product is of low quality, it will be willing to spend large amounts of money on advertising. O When a firm spends a small amount of money on advertising, this signals that the quality of the good is high. When a firm 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. While shopping for soda, Amy is trying to determine whether to purchase the generic cola or the brand ZCola. Although she would not notice the difference between the two in a blind taste test, she buys the higher-priced ZCola because she has seen it advertised as being "The drink that's the life of partiez." This illustrates a common A of advertising