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Question
KAM Corp. has developed a crème that when rubbed on the forehead makes wrinkles smooth out for 8 hours. The crème also has been tested and there are no side effects. When KAM advertises their new crème, they state that it "smoothes wrinkles without side effects for 12 hours". They also state that it also "makes you smarter and able to retain anything you read once, for the same 12 hours". This last statement is blatantly false and meant as a joke. This advertisement is placed in 50 magazines and newspapers nationwide. Your entire class smears layers of the crème on their foreheads, read their books and notes once and proceed to fail the final exam the next day. The class complains to the FTC.A.Since most of the advertisement is correct and a reasonable consumer will easily recognize that a crème can't make you instantly smarter, there is no FTC violation.
B.The FTC can assess a $10,000 fine for the false ad.
C.The FTC can assess a $500,000 fine for the false ad.
D.The FTC can assess a $500,000 fine for the false ad and require the publication of corrective advertising.
Answer
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