The Major Criticism of this Theory Finally, such critics argue that liability suits will increase and impose heavy losses on insurance companies, forcing insurance rates to rise precipitously.

The Major Criticism of this Theory Critics also contend that the theory will not actually reduce the number of accidents. Instead, it may have the un-intended effect of encouraging carelessness in consumers, which would cause even more accidents.

Social cost theorists counter by pointing out that, in reality, the costs of consumer liability suits are not large. Less than 1% of product-related injuries result in suits, and successful suits average only a few thousand dollars in any case. Moreover, the insurance industry has remained quite profitable, despite the warnings of the critics.

Advertising Ethics Advertere ( Lt) “ to make known” Anyone who seeks to provide goods & services in a market economy cannot do so unless he or she makes them know to potential purchasers.

Advertising Ethics “Would you persuade, speak of interest, not of reason.” Ben Franklin. “Promise, large promise, is the soul of advertising.” Samuel Johnson (1704-84)

Advertising Ethics “Advertising is legalized lying.” H. G. Wells “Advertising persuades people to buy things they don’t need with money they ain’t got.” Will Rogers

Commercial advertising Advertising is a huge industry, which imposes great expense on manufacturers and service providers. Commercial advertising is sometimes defined as a form of "information" and an advertiser as "one who gives information.

Advertising Ethics The implication is that the defining function of advertising is to provide information to consumers. In the end, consumers must cover the costs of advertising, but what do they get for this extra expenditure?

Most consumers say that they get very little Most consumers say that they get very little. So, is advertising a waste, or a benefit? Does it help or harm consumers?