When a market is perfectly competitive, advertising typically is done _____ because _____.
A)for the entire industry; it affects market demand more effectively than some individual company demands
B)by individual companies; it effectively differentiates each company's product
C)for the entire industry; with only one company, the market demand is the company demand
D)by individual companies; it helps the advertising company stand out from the others

Question

Quizplus · Accepted Answer

In a perfectly competitive market, individual companies sell products that are perfect substitutes for each other, making it difficult to differentiate one company's product from another's. Therefore, advertising is more effective when done for the entire industry, as it can increase the overall demand for the product category rather than just shifting market share between companies.

When a Market Is Perfectly Competitive, Advertising Typically Is Done