One In the News article is titled "The Cola Wars: It's Not All Taste." Firms in a monopolistically competitive industry,such as the soft drink market,are likely to
A)Meet together to set prices.
B)Behave exactly like a monopoly.
C)Advertise to create brand loyalty.
D)Attempt to reduce market power.

Question

Quizplus · Accepted Answer

Monopolistically competitive firms have some degree of market power, but not as much as a monopoly. To differentiate their products and create brand loyalty, firms in this market structure often engage in extensive advertising and marketing efforts. This is exemplified in the article title "The Cola Wars: It's Not All Taste," which implies that the rivalry between Coca-Cola and Pepsi extends beyond taste and into branding and marketing strategies. Therefore, option C is the best choice.

One in the News Article Is Titled "The Cola Wars