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Sati [7]
3 years ago
7

Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as

Business
1 answer:
densk [106]3 years ago
5 0

Answer: the marginal benefit of advertising exceeds the marginal cost of advertising

Explanation: Under a monopolistic competition, there are fewer sellers in the market, and due to the fact that a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as the marginal benefit of advertising exceeds the marginal cost of advertising allowing the monopolist to turn a profit for the business while keeping it relevant for as long as is possible.

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