Question

Firms that spend the greatest percentage of their revenue on advertising tend to be firms that sell A. goods produced by natural monopolies. B. highly-differentiated consumer goods. C. agricultural products. D. products with a limited shelf life such as milk and lettuce.

Answer 1

Answer:

B. This is a firm that sell highly differentiated consumer goods

Explanation:

This tends to explain monopolistic competition type of market in which many firms sell products that are similar but not identical. In this market there are many sellers or firms competing for the same group of customers. It is a market structure that lies between the extreme cases of competition and monopoly. Hence, many producer or firm uses advertisement to attract many customer and they spend large percentage of their profit on advertisement in order to control the larger part of customers in the market.