Which of the following best explains how promotion helps the economy grow?

• A. Promotion decreases the need for innovation in the market.
• B. Promotion reduces the cost of raw materials for producers.
• C. Promotion increases consumer awareness, leading to higher demand and greater production.
• D. Promotion eliminates competition among firms.

Answer: (C)

Verified step by step guidance

1. Understand the role of promotion in microeconomics: Promotion refers to marketing activities that increase consumer awareness about products or services.
2. Recognize that promotion does not directly affect the cost of raw materials or eliminate competition; instead, it influences consumer behavior.
3. Analyze how increased consumer awareness from promotion can lead to higher demand for goods and services.
4. Higher demand encourages firms to increase production to meet consumer needs, which can stimulate economic growth.
5. Summarize that promotion helps the economy grow by boosting demand and production, rather than by reducing costs or limiting competition.