Advertising is most likely to occur in which market structure:

Question

Quizplus · Accepted Answer

Advertising is most commonly found in markets with monopolistic competition, where firms sell differentiated products and have some control over price. This type of market structure incentivizes firms to differentiate their products through advertising to make their product stand out from those of their competitors. In a perfectly competitive market (choice A), there is no need for advertising because all firms sell identical products and are price takers. In a monopoly (choice D), the single firm has complete control over the market and may not need to advertise to maintain its dominance.

Advertising Is Most Likely to Occur in Which Market Structure