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.

Question

Quizplus · Accepted Answer

Firms in a monopolistically competitive industry often use advertising as a means to create brand loyalty and differentiate their products from their competitors. This is evident in the soft drink industry with the various advertising campaigns and branding efforts used to appeal to consumers. Meeting together to set prices would be considered collusion and is illegal, while behaving like a monopoly goes against the principles of a monopolistically competitive market structure.

One in the News Article Is Titled "The Cola Wars