Asked by Alyssa E McVey on Jun 08, 2024
Verified
Only firms with some market power will gain from individually advertising their product.
Market Power
The ability of a company or entity to influence the price and production levels in a market.
- Learn about the pivotal role that advertising and brand names play in the framework of monopolistic competition.
Verified Answer
TM
Tooba MustafaJun 12, 2024
Final Answer :
True
Explanation :
Firms with market power have the ability to influence the price and quantity of their product in the market. By advertising their product, they can differentiate it from the competitors and create brand recognition. This can lead to increased demand and market share, which can allow them to charge higher prices and earn more profit. Therefore, only firms with some market power will gain from individually advertising their product.
Learning Objectives
- Learn about the pivotal role that advertising and brand names play in the framework of monopolistic competition.