« previous next »

Author Question: Explain why advertising is very important to a monopolistically competitive firm but not to a ... (Read 78 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?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Vesalius’s De Humani Corporis Fabrica was an important early work on the human species. Vesalius’s De Humani Corporis Fabrica was an important early work on the human species.
In countries where water can be contaminated, breastfeeding is an important option for the health of ... In countries where water can be contaminated, breastfeeding is an important option for the health of ...
Important Trace Elements in the Body Important Trace Elements in the Body
Hydrolysis reactions for some biochemically important phosphate compounds (part 2) Hydrolysis reactions for some biochemically important phosphate compounds (part 2)
Structures of other important isoprenoids Structures of other important isoprenoids
Red, fleshy fruits of hawthorn plants (Crataegus) are an important food for cedar waxwings (Bombycil Red, fleshy fruits of hawthorn plants (Crataegus) are an important food for cedar waxwings (Bombycil
Video: Bone Growth and Remodeling

For a complete list of videos, visit our video library