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 advertise in an attempt to
A)Allocate resources more efficiently.
B)Decrease the price elasticity of demand.
C)Reduce market power.
D)Increase the cross-price elasticity of demand

Question

Quizplus · Accepted Answer

In a monopolistically competitive industry, firms often engage in advertising to differentiate their products from those of competitors. This can make consumers more loyal to a specific brand, thereby decreasing the price elasticity of demand for that brand's product. It means consumers are less sensitive to price changes, allowing the firm potentially to charge higher prices without losing as many sales.

One in the News Article Is Titled "The Cola Wars