I have a problem with that statement too, but for different reasons.<p>Costs affect prices because if companies can&#x27;t make a profit, they stop doing business.  Under (near perfect) competition, prices tend to be a bit over cost.  Supply and demand may be the mechanism, but costs do indeed come into it.<p>In many cases though, advertising lowers prices because if you can sell more products, the average cost can be lower because of economies of scale.