Final answer:
Cross-promotion leads to mutual advertising benefits and expanded reach, as it leverages multiple audiences for increased exposure. For monopolistic competitors, successful advertising can raise demand, allowing firms to sell more products at higher prices.
Step-by-step explanation:
Among the options provided, the major effect that cross-promotion has for both the game maker and the advertiser is c) Mutual advertising benefits and expanded reach. Cross-promotion is a marketing strategy where two parties promote each other's products or services, aiming to leverage the audience of each other to improve visibility and sales. This can lead to increased exposure, tapping into new customer segments, and generally benefitting from the synergy of combined marketing efforts.
In terms of the self-check questions provided, when a monopolistic competitor successfully implements an advertising campaign, it can lead to a shift to the right in the perceived demand curve for its product. This increase in demand can translate to the ability to sell a greater quantity at a higher price, consequently increasing the firm's profits. The change in demand dynamics may result in a less price-sensitive customer base because of perceived differentiation through advertising, which justifies the price increase.