Monopolistically Competitive Industry

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1.In an oligopolistic market, firms pay close attention to the strategies of their rivals.  In monopolistic competition, with a large number of sellers, it is assumed that there is not this kind of rivalry, or interdependence.  Why is there probably some rivalry in many monopolistically competitive markets?

 

2.Economists have taken opposite stands on the effect advertising can have on the level of competition in a monopolistically competitive industry.  Describe how advertising could increase, and how it could decrease, competition in a monopolistically competitive industry?

 

    • 12 years ago
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