Companies pay for ads to be seen by more people. Imagine you're selling lemonade and your friend is also selling lemonade. If both of you shout 'Come buy my lemonade!' in the park, some people might still choose one over the other, but if you pay someone to put up a big sign saying 'Best Lemonade in Town!', more people will know about yours and might choose it.
Examples
- A bakery buys a big sign at the corner of the street to advertise their new chocolate cake.
- A toy company runs an ad during a popular cartoon, showing kids playing with their newest toy.
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See also
- Why Do Companies Raise Prices When Demand is High?
- What are dynamic pricing models?
- How Does Goodbye, Price Tags. Hello, Dynamic Pricing. Work?
- How Did Money Start and Why Do We Still Use It?
- How Did the Invention of Money Change Society?