Monopolistic CompetitioN Flashcards
FEATURES of monopolistic market
many sellers, product differentiation, free entry and exit (no barrier), product branding slightly different, many firms competing for the same group of consumers
what does many products that are only slighlty different lead to
advertising and branding
what is the incentive to advertise
to attract more buyers
advertising is needed for similar but differentiated products to tell consumers about —–
existence and characteristic of its product,
attract them away from its competitors,
create brand loyalty
during the pandemic, which advertising soared
digital
what do critics of advertising say about brands
they highlight and exaggerate small differences
benefits of advertising
increases competition,
willingness to spend on advertising tells us about the quality of the company
why are brand names good for societ
an incentive to firms to maintain a high quality