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:

Construct System

A psychological concept referring to the collection of ideas and beliefs through which a person perceives and interprets the world.

Permeable

Characteristic of a material or membrane that allows substances to pass through it.

Wide Spectrum

Encompassing a broad range of types, varieties, or categories.

Construct System

A framework of cognitive constructs within which a person perceives, interprets, and interacts with the world, guiding their understanding and behavior.