Question

What factors could lead to an increase in sales revenues that would not merit congratulations to the marketing manager?

Answer 1

Monopolistically competitive firms can increase demand for their products through factors like product differentiation, pricing strategies, improving customer service, and enhancing product quality.

Step-by-step explanation:

In a monopolistically competitive market, firms can increase demand for their products through several factors aside from advertising:

1. Product Differentiation: By offering unique features, designs, or branding, firms can attract more customers who are looking for a specific product.
2. Pricing Strategies: Adjusting prices, such as offering discounts or volume pricing, can incentivize customers to purchase more.
3. Improving Customer Service: Providing excellent customer service can build loyalty and attract new customers through positive word-of-mouth.
4. Enhancing Product Quality: By constantly improving the quality of their products, firms can gain a competitive edge and increase demand.