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I am still unable to understand the technical language that is used in this question. Licensing, Advertising, Circulation - how is it linked together & what does the last part endangering other revenues mean?
There is a magazine named Kitchen Magazine.
What do you understand from this? Kitchen Magazine would publish certain stuff related to cookware or cooking articles. It will receive advertising revenues from manufacturers who want to advertise their cookware.
Now, this Magazine itself is launching its own cookware. And it is using its own brand name that is the magazine name for this product. For example if the Magazine Name is Kitchen, The product name is also Kitchen Frypan.
There are 2 conditions it needs to evaluate before taking this decision.
Imagine a situation where-
Situation 1:
This new product, Kitchen Frypan is not of a good quality. It just breaks even after careful use. The customer service is also not good.
Do you think this may also affect the sale of the magazine. Yes it will. People will have an opinion that the magazine has looted them and has launched a faulty product. Thus this may affect their subscription fees as less people will buy the magazine.
However. the company has tested the product extensively and has come to a conclusion that there can be no fault in the product.
Situation 2: This is our assumption. It is not discussed in the question.
There are other kitchenware manufacturers who advertise in the magazine. Say competitor Prestige Fry pan. Now don’t you think the other manufacturers may hesitate to advertise their brand in a competitor’s magazine. Because the magazine would be biased to provide exclusive coverage to its own products.
But this is not mentioned in the argument. The argument simply ignores this or assumes that situation 2 wold not occur. So this our right answer-
(C) Makers of cookware will not find Kitchen a less attractive advertising vehicle because the magazine's name is associated with a competing product.