Firms operating in a perfectly competitive market have an incentive to advertise their products since this will increase the demand for their products.

Name: Firms operating in a perfectly competitive market have an incentive to advertise their products since this will increase the demand for their products.
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Question

​Firms operating in a perfectly competitive market have an incentive to advertise their products since this will increase the demand for their products.

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers and sell homogeneous products, meaning advertising to increase demand is ineffective since consumers see all products as identical.

​Firms Operating in a Perfectly Competitive Market Have an Incentive

Firms Operating in a Perfectly Competitive Market Have an Incentive