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Question
Why would perfectly competitive industries advertise even though individual firms do not?
a. Even though the output of an individual firm would be considered homogeneous to other firms, the industry output would be differentiated (for example, Florida orange juice versus imports).
b. Individual perfectly competitive firms dont need to advertise because they already have market power, but the industry would need to advertise.
c. Government price supports exist for most perfectly competitive producers, so they dont need to advertise, but industry price supports dont generally exist.
d. Industries advertise because they pay for commercials and it allows consumers to watch TV and listen to the radio for free.
e. Individual firms produce perfectly differentiated output, but the industry produces homogeneous output that needs to be differentiated.
Answer
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Related questions
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