Why do firms in a monopolistically competitive industry advertise? Research a fi

Question

Why do firms in a monopolistically competitive industry advertise? Research a firm you feel would be in monopolistic competition and explain their advertising scheme in a short summary. Be sure and cite your reference. How is collusion used in oligopoly markets? What is a cartel? Are they legal? Give one example of either collusion or a cartel that has occurred in the past. Given the following graph for a monopolist, answer the questions provided: What is the optimum output level that this monopolist would want to produce? What price will the monopolist want to charge? What is the amount of profit that this monopolist will receive?

Explanation / Answer

8) Monopolistically competitive industry does need advertising, First even in a monopolistic market message of the company must reach people to generate sales, This is the primary reason for advertising, Besides this as there is more than one firm in the market competition naturally promotes advertising and marketing

In China both China mobile and China unicom advertise all over the country, They both are best example of monopolstic competition, Only two GSM networks service Whole of China

9) In oligopoly few companies compete for market share, The market in oligopoly is very different the best examples are pharma industry where fewer companies own rights for drugs, These companies sometimes form cartels to regulate market price and fix it.

There are several instances in past where cartels were formed and consumers lost billions of dollars due to such cartels. Cartels are illegal

De beers was the best example, It used to control 90% of diamond market.

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