Because a Monopolistic Competitor Has Some Monopoly Power, Advertising to Increase

question 199

Multiple Choice

Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as:

• A) the marginal benefit of advertising is positive.
• B) the marginal cost of advertising is positive.
• C) the marginal benefit of advertising exceeds the marginal cost of advertising.
• D) the marginal cost of advertising exceeds the marginal benefit of advertising.

---

Definitions:

Preparedness

The concept that certain associations are learned more readily than others due to evolutionary predispositions.

Food Aversion

A strong dislike or disinclination towards a specific food, often resulting from a negative past experience such as illness.

Behavior Modification

A therapeutic approach designed to change specific undesirable behaviors using reinforcement principles.

Classical Conditioning

The method of instruction where a response is learned by associating a stimulus from the environment with one that occurs naturally.