One reason that monopolistically competitive firms often use celebrity endorsements is that:
A)the firm owners like to be around celebrities so they can feel important.
B)they can link their product's reputation with the celebrity's reputation.
C)celebrity endorsements are so inexpensive.
D)firms like to spend money on famous people.
E)the firms like to spend a lot on advertisements.

Question

Quizplus · Accepted Answer

Monopolistically competitive firms use celebrity endorsements because they can link their product's reputation with the celebrity's reputation. This association helps to differentiate their product from competitors and may attract more consumers. Celebrity endorsements can, however, be expensive.

One Reason That Monopolistically Competitive Firms Often Use Celebrity Endorsements