Final answer:
Monopolistically competitive firms advertise to differentiate their products and increase demand. They can also increase demand through product innovation, quality improvement, customer service, and brand image.
Step-by-step explanation:
In monopolistic competition, firms advertise to differentiate their products from competitors. Advertising can either increase demand or decrease price elasticity of demand, or both. A successful advertising campaign can allow a firm to sell a greater quantity of products and charge a higher price, which ultimately increases its profits. Aside from advertising, monopolistically competitive firms can also increase demand by focusing on product innovation, improving quality, offering better customer service, or creating a unique brand image.