Do firms in perfect competition advertise their products? Why or why not?
What will be an ideal response?
Firms in perfect competition do not advertise their product. The purpose of advertising is to increase the demand for the firm's product by convincing consumers that it's better than that of competitors. Perfectly competitive firms sell a standard product, so consumers won't believe that, for example, wheat sold by Farm A is somehow better than wheat sold by Farm B. So if a perfectly competitive firm advertised, this would only increase its costs, with no effect on demand and price.
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