问题 单项选择题

Which of the following is least accurate with regard to advertising for firms operating under monopolistic competition()

A. The increase to average total costs associated with advertising increases as output increases.

B. Advertising expenses are high relative to perfect competition and monopoly.

C. Advertising is necessary to communicate the unique features of a firm’s products.

答案

参考答案:A

解析:

Advertising expenses are high for firms in monopolistic competition. Not only because firms need to inform consumers about the unique features of a firm’s products, but also to create or increase a perception of differences between products that are actually quite, similar. Advertising costs increase average total costs, but the increase to average total cost attributable to advertising decreases as output increases because more fixed advertising dollars are being averaged over a larger quantity. If advertising increases output (sales) significantly, it can actually decrease a firm’s average total cost if there are economies of scale.

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单项选择题