How can advertising influence demand? Provide a plausible Australian example.

• A. Advertising reduces consumer awareness of products.
• B. Advertising can shift demand to the right by increasing perceived value.
• C. Advertising has no effect on demand.
• D. Advertising always lowers prices for consumers.

Answer: (B)

Advertising changes demand by shaping how valuable a product appears to buyers and how aware they are of it. When ads make people see more benefit or better suitability for their needs, more consumers want to buy at every price, so the entire demand curve shifts to the right. A plausible Australian example is an advertising campaign for electric vehicles that highlights lower running costs, government rebates, and a growing charging network. As Australians perceive greater value and practicality, more households decide to buy EVs at the same prices, increasing overall demand.