Some firms have an incentive to advertise because they sell a

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Firms that sell a differentiated product and charge a price above marginal cost have an incentive to advertise because they can create brand loyalty, differentiate their product from their competitors' products, and increase their market power, allowing them to charge higher prices. Advertising can also inform consumers about new products or features, attract new customers, and increase overall demand for the product.

Some Firms Have an Incentive to Advertise Because They Sell