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    Advertising in monopolistic competition and oligopoly

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    Why there is so much advertising in monopolistic competition and oligopoly? How does such advertising help consumers and promote efficiency? Why might it be excessive at times?

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    Monopolistic competition is characterized by firms with very similar products, such as hotels. In the long run for monopolistic competition, when one firm is profitable, it will attract competitors. This fosters advertising as each firm attempts to differentiate its product by brand name. A way for these firms to maintain their ...

    Solution Summary

    Relationship between market structure and advertising.