In monopolistic competition, if a firm advertises and effectively raises consumer awareness of its product, it tends to
A) raise costs and increase demand for its product.
B) raise costs and decrease demand for its product.
C) lower costs and increase demand for its product.
D) lower costs and decrease demand for its product.

Question

Quizplus · Accepted Answer

Advertising increases consumer awareness and demand for a product, but it also increases costs.

In Monopolistic Competition, If a Firm Advertises and Effectively Raises