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Budweiser (now owned by a Belgium based beer company called InBev),

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Budweiser (now owned by a Belgium based beer company
called InBev), Miller and Coors who together produce 85%
of all beer consumed in the US, each spend well over $250
million a year on television advertising campaigns,
promoting their beer brands. Obviously, if one firm is
advertising its brands heavily, the others must also
advertise to defend their market shares.
Question: Do you think these firms would welcome
congressional legislation which restricted the amount that
any one firm could spend on advertising to $1 million
yearly, and thereby allowed them all to drastically reduce
their costs without fear of losing ground to each other? Are
wireless telephone companies in the US market conducting
the same practice of non-price competition? Explain your
answer in both cases.
Solution
yes, they need to be minimized the cost on advertising.
because there are only two players and the products are
not regular commodites, and less alternatives are
available.
they need to be spend this huge amount of money for
some other activities and they will get good will and brand
name in the market.

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Budweiser (now owned by a Belgium based beer company called InBev), Miller and Coors who together produce 85% of all beer consumed in the US, each spend well over $250 million a year on television advertising campaigns, promoting their beer brands. Obviously, if one firm is advertising its brands heavily, the others must also advertise to defend their market shares. Question: Do you think these firms would welcome congressional legislation which restricted the amount that any one firm could spend on advertising to $1 million yearly, and thereby allowed them all to drastically reduce their cost ...
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