« previous next »

Author Question: Explain why advertising is very important to a monopolistically competitive firm but not to a ... (Read 77 times)

danielfitts88

  • Hero Member
  • *****
  • Posts: 535
on: Jun 30, 2018
Explain why advertising is very important to a monopolistically competitive firm but not to a perfectly competitive firm or a monopolistic firm.

Question 2

Which of the following activities can create an external cost?
 a. Honking continuously while driving past a hospital.
  b. Reducing the use of plastic carry bags while shopping.
  c. Burying garbage under the soil and planting trees on it.
  d. Using smog controls on private cars.


pami445

  • Sr. Member
  • ****
  • Posts: 303
Reply #1 on: Jun 30, 2018
Answer to Question 1

A monopolistically competitive firm advertises in order to increase demand for its goods and make demand more inelastic. In contrast, a perfectly competitive firm sells a homogeneous good and can sell all it wants at the market price. As such, it has no reason to advertise at all. While a monopolistic firm could potentially increase demand for its good, advertising is generally not as important as a form of non-price competition because there are no other firms with which to compete in the industry.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

If all the neurons in the human body were lined up, they would stretch more than 600 miles.

Did you know?

The first successful kidney transplant was performed in 1954 and occurred in Boston. A kidney from an identical twin was transplanted into his dying brother's body and was not rejected because it did not appear foreign to his body.

Did you know?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

When Gabriel Fahrenheit invented the first mercury thermometer, he called "zero degrees" the lowest temperature he was able to attain with a mixture of ice and salt. For the upper point of his scale, he used 96°, which he measured as normal human body temperature (we know it to be 98.6° today because of more accurate thermometers).

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Checking teeth and other physical examinations are an important part of horse care. Checking teeth and other physical examinations are an important part of horse care.
It is important to ask patients what other health care providers they are seeing, such as the dentis It is important to ask patients what other health care providers they are seeing, such as the dentis
Animal carcasses like this South African wildebeest provide important nutrition for both hunters and Animal carcasses like this South African wildebeest provide important nutrition for both hunters and
It is important for new employees to know the location of all fire extinguishers. (A) Pull the pin ... It is important for new employees to know the location of all fire extinguishers. (A) Pull the pin ...
It is important for new employees to know the location of all fire extinguishers. (B) Aim low toward ... It is important for new employees to know the location of all fire extinguishers. (B) Aim low toward ...
Mechanisms of action of vitamin E, one of the most important lipid-soluble antioxidants Mechanisms of action of vitamin E, one of the most important lipid-soluble antioxidants
Video: Pressure volume relationships - Normal inspiration and expiration

For a complete list of videos, visit our video library