Why does perfect competition shun advertising? Does advertising benefit a monopoly?
What will be an ideal response?
In perfect competition, advertising expenditure by firm X will bring most of its benefits to the other firms in the industry, because the ads, if they work, will induce customers to buy more of the identical product from among any of its many sellers. But if a monopoly takes over from a perfectly competitive industry, it may very well pay to advertise. If management believes that the creative touch of the advertising agency can make consumers rush to the market to purchase the product whose virtues have been extolled on television, then the firm will allocate a substantial sum of money to accomplish this feat. This type of expenditure could shift the demand curve outward.
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Rick lost his job as a logistics and distribution coordinator nearly three years ago. After a long and failed search, Rick finally gives up and stops looking for a new job
Rick's decision to suspend his job search causes the unemployment rate to ________ and the labor force participation rate to ________. A) increase; stay the same B) increase; increase C) increase; decrease D) stay the same; decrease E) decrease; decrease
Why does the trade-off between consumption goods and capital goods represent a trade-off between the present and the future?
What will be an ideal response?