Why do firms in a monopolistically competitive industry advertise?
What will be an ideal response?
In a monopolistically competitive industry, products sold by firms are differentiated or at least perceived to be different by consumers. Other things being equal, product differentiation can result in more profits. Firms can therefore increase their monopoly power and thus profits by differentiating their own products from those of other firms.
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Explain what a proportional tax is and provide an example
What will be an ideal response?
Describe the product cycle, including addressing the various inputs that are required over time and the resulting production location decisions
What will be an ideal response?
Joan loves to eat sushi. Her first piece of sushi normally yields a marginal benefit of $5. Each additional piece creates a declining marginal benefit by $0.25 per piece. If her favorite sushi bar charges $2.75 per piece of sushi, how many pieces should she eat?
a. 8 b. 10 c. 5 d. 11
A monopolistically competitive firm that is incurring a loss will produce in the short run as long as the revenue the firm receives is sufficient to cover
A. advertising costs. B. marginal costs. C. variable costs. D. fixed costs.