Final answer:
Advertising first made consumers aware of product differences and prices, which is true. It was essential in an economy with increasing product variety and competition, helping to shape consumer demand and increase profits for businesses.
Step-by-step explanation:
True, advertising first made consumers aware of differences in products and prices in the marketing economy. The expansion of product variety and the rise of monopolistic competition led to the need for businesses to distinguish their products from those of competitors. By informing consumers about the characteristics and prices of different products, advertising played a crucial role in influencing consumer choices and shaping the market landscape.
During the Industrial Age, the increase in goods available and the rise of the consumer culture necessitated the use of advertising to compete for customers. The advent of new and improved products required businesses to make their offerings stand out. Subsequently, professional advertising agencies came into existence, and businesses invested heavily in creating consumer demand.
The role of advertising in economic markets is twofold: it can either make demand for a product more inelastic or it can increase the product's demand. Successful advertising campaigns enable firms to either sell more of their products, charge a higher price, or both, thereby increasing profits.