Problem:
Budweiser, Coors and Miller, who together manufacture 80% of all beer consumed in US, each spend well over $250 million the year on television advertising campaigns, promoting their beer brands. Perceptibly, if one firm is advertising its brands heavily, the others should also advertise to defend their market shares.
Do you think such firms would welcome congressional legislation which restricted the amount that any one firm could spend on advertising to $1 million annually and thereby allowed them all to decrease their costs without fear of losing ground to each other? Describe your answer.