Monopolistic CompetitioN Flashcards

1
Q

FEATURES of monopolistic market

A
many sellers,
 product differentiation, 
free entry and exit (no barrier), 
product branding slightly different, 
many firms competing for the same group of consumers
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2
Q

what does many products that are only slighlty different lead to

A

advertising and branding

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3
Q

what is the incentive to advertise

A

to attract more buyers

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4
Q

advertising is needed for similar but differentiated products to tell consumers about —–

A

existence and characteristic of its product,
attract them away from its competitors,
create brand loyalty

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5
Q

during the pandemic, which advertising soared

A

digital

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6
Q

what do critics of advertising say about brands

A

they highlight and exaggerate small differences

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7
Q

benefits of advertising

A

increases competition,

willingness to spend on advertising tells us about the quality of the company

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8
Q

why are brand names good for societ

A

an incentive to firms to maintain a high quality

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