Final answer:
Comparative advertising is a common form of competitive advertising that involves direct comparisons with competitor's products. It aims to show the advantages of a firm's product in comparison to others, assisting in differentiating offerings in a monopolistic competitive market.
Step-by-step explanation:
A common form of competitive advertising is comparative advertising. This technique involves comparing one's own product directly with competitive products. Comparative advertising is designed to highlight the advantages of the products or services offered by the firm and how these benefits stack up against those of competitors. Advertising strategies play a crucial role in monopolistic competition, where firms must distinguish their offerings from those of other firms.
In the competitive market, especially within the backdrop of monopolistic competition, advertising can either make the firm's perceived demand curve more inelastic or cause an increase in demand for the firm's product. A successful comparative advertising campaign can lead to an elevated brand position and can allow the firm to sell a greater quantity or to charge a higher price, or even both, thereby increasing its profits. The impact of advertising has been significant since the competition escalated with a variety of goods in the late 19th and early 20th centuries, leading to a rise in the importance and complexity of marketing and advertising strategies.