Which statement about advertising is TRUE?
A)There is no role for advertising in perfect competition.
B)Firms in monopolistic competition and oligopoly use advertising without the expectation of increasing profit.
C)Advertising has costs but few if any benefits.
D)Advertising is critical in the long run but not the short run.

Question

Quizplus · Accepted Answer

In perfect competition, products are considered to be homogeneous, and firms are price takers with no control over the market price. Therefore, there is little to no need for advertising, as it would not affect the demand for a perfectly competitive firm's product significantly.

Which Statement About Advertising Is TRUE