Question

Advertising benefits society by:

a) Increasing monopoly power
b) Increasing firm profits
c) Increasing search time
d) Conveying information to consumers
e) Lowering the cost of production

Answer 1

Advertising in monopolistic competition can benefit society by conveying information to consumers and providing firms with the opportunity to sell more or charge higher prices.

Step-by-step explanation:

How does advertising impact monopolistic competition?

Advertising in monopolistic competition can benefit society by conveying information to consumers. It helps firms differentiate their products and create a perceived demand that is either more inelastic or greater in quantity, leading to increased profits.A successful advertising campaign may allow a firm to sell a greater quantity of products or charge higher prices.