ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Is advertising important to a monopolistic competition?
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yes
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no
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -Advertising is commonly used by firms operating under monopolistic competition as a way to create product differentiation and thus to acquire some degree of market control and thus charge a higher price.
Detailed explanation-2: -Firms in a monopolistic competition market will use advertising to maintain their profits because advertising affects the products of the firm by increasing its demand.
Detailed explanation-3: -Firms in monopoly, monopolistic competition, and oligopoly use advertising when they expect it to increase their profits.
There is 1 question to complete.