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The Main Reason Firms in Perfect Competition Do Not Advertise

Question 53

Multiple Choice

The main reason firms in perfect competition do not advertise their product is because


A) they have no control over the price of their product and would not be able to leverage any brand loyalty.
B) their product is homogenous and doing so would incur a cost without necessarily increasing their own sales.
C) there are too many consumers to reach, making their cost of advertising unaffordable.
D) the low barriers to entry would encourage new firms to enter the market to take advantage of the free advertising.

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