Question

Sales promotion and other non-price activities by individual firms will not occur in an industry reflecting pure competition since products are relatively homogeneous.

a. True
b. False

Answer 1

Sales promotion and other non-price activities can occur in a monopolistically competitive industry.

Step-by-step explanation:

In a monopolistically competitive industry, products are relatively differentiated, meaning they are not identical. This differentiation allows firms to engage in various non-price activities, such as sales promotion, advertising, enhanced customer service, product innovation, and branding, in order to attract customers and differentiate themselves from competitors. Therefore, the statement that sales promotion and other non-price activities by individual firms will not occur in an industry reflecting pure competition is false.