Final answer:
In pure competition, a firm's quantity supplied should increase as the price rises. This is because profits are maximized when marginal revenue is equal to marginal cost. For a monopolistic competitor, an increase in demand due to successful advertising can raise both price and quantity supplied, but this may be temporary if other firms enter the market.
Step-by-step explanation:
The quantity of a product supplied by a firm in pure competition should increase as long as the price rises. This is because in a perfectly competitive market, a firm's profit is maximized when marginal revenue, which is equal to the market price, is equal to marginal cost. Therefore, if the market price increases, this provides an incentive for firms to increase output up to the point where the new price equals marginal cost.
If we examine a monopolistic competitor, an increase in demand for its product due to a successful advertising campaign would likely lead to an increase in both the product's price and the quantity supplied. This firm has some degree of market power, so it can set prices above marginal cost. However, if the firm experiences positive economic profits, in the long run, entry by other firms would increase competition, ultimately decreasing demand for the original firm's product and driving the price down to a level where the original firm would earn zero economic profits.