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Chapter 16 HMWK

  1. Muse a little about the role of advertising in industries classified as monopolistic competition or even oligopoly. Can advertising make markets either more or less competitive?  How?
  2. What was the most interesting thing you learned in this chapter?  Why was it interesting to you?



Advertising can raise awareness of options in a market. Even in an industry classified as monopolistic competition, developing a brand name signals consistency. Even if they don't rattle off a list of specifications and benefits, spending money on ads shows that a company believes in their product. Strengthening brand loyalty will pay off in the long run with repeat customers.

The psychology behind advertising was most interesting to me. People are emotional creatures, and it is interesting to see what influences them. I'm especially interested in how the messages and tactics change depending on targeted demographics. For example, the way laundry detergent is marketed to moms vs. college guys. 

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