Why Do Oligopolists Use Product Development and Advertising

question 74

Multiple Choice

Why do oligopolists use product development and advertising?

• A) They are less easily duplicated than price cuts as a competitive strategy.
• B) They enhance the public good by providing information and new products.
• C) They contribute to productive and allocative efficiency in markets.
• D) They create conditions for mutual interdependence and support.

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Definitions:

Influence

The capacity or power of individuals or things to be a compelling force on the actions, behavior, opinions, or development of others.

Loss and Risk Aversion Heuristic

A cognitive bias where people prefer to avoid losses rather than acquiring equivalent gains, indicating a greater sensitivity to losses over gains.

Error

A mistake or inaccuracy, often due to oversight or misunderstanding, which can affect outcomes or validity.

Judgment

The faculty to formulate thoughtful decisions or derive sound conclusions.