Add Papers Marked0
Paper checked off!

Marked works

Viewed0

Viewed works

Shopping Cart0
Paper added to shopping cart!

Shopping Cart

Register Now

eKönyvtár library
FAQ
 

Great deal: today with a discount!

Regular price:
1 016 Ft
You save:
110 Ft
Discounted price*:
905 Ft
Purchase
Add to Wish List
ID number:907631
Evaluation:
Published: 21.12.2004.
Language: English
Level: Secondary school
Literature: n/a
References: Not used
Extract

However, the above mentioned market structures are very rare in practice. In reality there mostly exist imperfect competition such as monopolistic competition and oligopoly. In these structures most of the firms do compete very aggressively against each other and therefore advertising is a very important tool. Monopolistic competition is a structure with quite a large number of firms. Each firm has an insignificantly small share of the market. In a monopolistic competition, firms are quite independent. As a result of this, an individual firm is unlikely to affect its rivals to any great extent. In making decisions it does not have to think about how its rival will react. Advertising is used for product differentiation. For example, a hairdresser offers to pluck the eyebrows for free if you get a haircut and advertises this.
Oligopoly is defined as an industry in which there are a few firms. By a few it is meant that the number of firms should be sufficiently small for there to be conscious interdependence, with each firm aware that its future prospects depend not only on its own policies, but also those of its rivals. The firm's products are close substitutes, which is why there is a high and positive cross elasticity of demand. Therefore the firms use lots of advertising to get consumers to buy their products instead of the products of a competitor. That can be seen in the example of the supermarkets, outlined above.

Load more similar papers

Send to email

Your name:

Enter an email address where the link will be sent:

Hi!
{Your name} suggests you to check out this eKönyvtár paper on „Advertising and the Theory of the Firm”.

Link to paper:
https://eng.ekonyvtar.eu/w/907631

Send

Email has been sent

Choose Authorization Method

Email & Password

Email & Password

Wrong e-mail adress or password!
Log In

Forgot your password?

Facebook

Not registered yet?

Register and redeem free papers!

To receive free papers from eKönyvtár.com it is necessary to register. It's quick and will only take a few seconds.

If you have already registered, simply to access the free content.

Cancel Register