Question

Reasons to promote include all of the following except?

1) Increase sales by increasing consumer demand
2) Attract new buyers
3) Create a price war
4) Remind consumers of existing products and why they are special

Answer 1

Advertising in monopolistic competition can increase demand and profits for firms, but creating a price war is not a reason to promote a product.

Step-by-step explanation:

In the framework of monopolistic competition, advertising can help firms increase demand for their products. A successful advertising campaign may allow a firm to sell a greater quantity or charge a higher price, or both, which can increase its profits. However, creating a price war is not a reason to promote a product, as it can lead to decreased profits for all firms involved.