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
2
Q
what does many products that are only slighlty different lead to
A
advertising and branding
3
Q
what is the incentive to advertise
A
to attract more buyers
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
5
Q
during the pandemic, which advertising soared
A
digital
6
Q
what do critics of advertising say about brands
A
they highlight and exaggerate small differences
7
Q
benefits of advertising
A
increases competition,
willingness to spend on advertising tells us about the quality of the company
8
Q
why are brand names good for societ
A
an incentive to firms to maintain a high quality
