Which of the following is a reason why individual firms under pure competition would not find it gainful to advertise their product?
A)Firms produce a homogeneous product.
B)The quantity of the product demanded is very large.
C)The market demand curve cannot be increased.
D)Firms do not make long-run profits.

Question

Quizplus · Accepted Answer

Under pure competition, firms produce a homogeneous product, meaning each firm's product is identical or nearly identical to that of its competitors. Therefore, advertising to try to persuade consumers to choose one firm's product over another's is not gainful because the products are indistinguishable from each other in the eyes of consumers.

Which of the Following Is a Reason Why Individual Firms