Which of the Following Statements Is True About Advertising by a Monopolistically

question 72

Multiple Choice

Which of the following statements is true about advertising by a monopolistically competitive firm?

• A)Since the monopolistic competitor, like the perfect competitor, makes zero profit in the long run, it is a waste of resources to advertise its products.
• B)Advertising could make the monopolistic competitor's demand more inelastic, but advertising has no effect on a perfect competitor's demand.
• C)Advertising will be more beneficial if a monopolistic competitor colludes with other firms to advertise the products of the industry as a whole rather than an individual firm's product.
• D)Monopolistically competitive firms tend to shun advertising because advertising draws attention to the variety of differentiated products available in the industry.

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Definitions:

Secondary Reinforcer

A stimulus that has become reinforcing through its association with a primary reinforcer.

Primary Reinforcer

A stimulus that is naturally rewarding and satisfies a basic biological need, such as food or water, which does not require learning to be effective.

Negative Punishment

A behavior modification technique where a desired stimulus is removed following unwanted behavior, with the goal of decreasing the likelihood of the behavior occurring again.

Interval Schedule

In operant conditioning, a reinforcement schedule where rewards are given after a variable or fixed duration of time has passed.