Final answer:
Large oligopolists advertising enhances competition by promoting product differentiation and lowers search costs for consumers by providing relevant product information, facilitating informed decision-making. The correct options are: c) it enhances competition and reduces monopoly power and d) it lowers search costs of information for consumers.
Step-by-step explanation:
The positive effects of large oligopolists advertising are multifaceted.
- Firstly, it enhances competition and reduces monopoly power by signaling that firms are competing based on product differentiation. This competition can lead to benefits for consumers, including innovation and potentially lower prices in the long term, as firms strive to win market share.
- Secondly, advertising can lower search costs of information for consumers by providing them with knowledge about the products available in the market, enabling them to make more informed choices more easily. It is important to note, however, that advertising in an oligopoly does not eliminate competition among firms; rather, it can be a form of competition itself. Nor does it necessarily reduce demand for material products, as advertising often seeks to increase demand for a firm's product.