Final answer:
Monopolistically competitive firms can increase demand through product differentiation and bundling.
Step-by-step explanation:
In addition to advertising, monopolistically competitive firms can increase demand for their products through product differentiation and bundling.
Product differentiation refers to the process of making a product or service distinct from others in the market. By creating unique features, design, branding, or packaging, firms can attract more customers and increase demand for their products. For example, a clothing brand may differentiate itself by offering trendy styles or sustainable materials.
Bundling is another strategy where a firm sells multiple products or services as a package deal. This can create value for customers by offering convenience, cost savings, or additional benefits. For instance, a fast-food restaurant may offer combo meals that include a burger, fries, and a drink at a discounted price.
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