answer as soon as possible please thank you Time for an honest moment here, stop

Question

answer as soon as possible please thank you

Time for an honest moment here, stop and think about how much advertising influences your consumption decisions. When is the last time you can remember choosing one product over another because of advertising? With this question being our starting point, it would be great to see if people can also address the following issues: What role does advertising play in influencing consumption in monopolistic competition? Does the impact of advertising allow for some price leverage by firms in this market structure? Why or why not? Is the United States truly an economy that promotes competition? Think about the markets where major oligopolies exist, for instance soft drinks/fast foods and automobile manufacturing, is there really a free market place or do oligopolies/major corporations dominate our economy

Explanation / Answer

Solution:

Advertising helps me to know more about new products on offer, different alternatives and their features. Hence, it makes a strong impact upon my consumption decision. Here, it should be noted that advertising helps me to take rational decisions, rather influencing to opt for the inferior alternatives in lieu of better alternatives. So, the impact of advertising is unidirectional that is to improve the consumption decision and maximize the utility drawn. It can be illustrated by one example, when I replaced my Sony mobile phone. I had the options to buy either Sony again, Samsung and Xiaomi as per my budget. But, I opted for the Xiaomi handset and it was on the basis of advertising, reviews, features as well as price comparison. I found to go with Xiaomi brand, rather going with the Samsung or Sony. So, advertising helped me to take sensible decision and opt for the value for money product. If advertising could not be there, then I might end up with Sony again as it has given a good service in the recent past.

The US economy has a glorious past that it has never retrained from taking action against any big MNCs who have tried to manipulate the market and gave decisions in favor of smaller companies. The Microsoft and Apple are few examples who have faced it. In the distant past, big trusts (conglomerate of companies) exercising market power, have been broken down into smaller companies by the regulatory bodies to protect the free and fair competition in the US economy. Besides, the regulations like Clayton act, Sherman Act, IPR rights and stringent monitoring of the &A are some of the dimensions that prove that there is a promotion of competition in the US economy.

There is a free market place and it should be understood by the opportunity to operate for all the businesses without any coercion, anti-trust and manipulation using predatory pricing. Big MNCs operating in the business domain in FMCG or in automobile is the demand of the industry to be cost efficient and apply economy of scale. It finally transfer the benefits to the consumers. But, it does not mean that new players cannot enter the market. Rather, new players with substitutes, enter the market and go away with the market share. So, there is a free competition in these markets. It is the demand of the industry that requires big investments in the beginning, causing a restriction. But, any capable player can enter unless government regulations cause restriction to it.

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