Economics Monopolistic Competition Questions
The role of advertising in monopolistic competition is to differentiate products and create brand loyalty among consumers. It allows firms to highlight the unique features and benefits of their products, making them appear distinct from their competitors. Advertising also helps firms to increase their market share and maintain a competitive edge by influencing consumer preferences and perceptions. Additionally, advertising can create barriers to entry for new firms by increasing brand recognition and customer loyalty, making it more difficult for new entrants to attract customers.