Eco 204 Final Paper

1485 Words Jun 24th, 2011 6 Pages
In this case, two smart lawyers with economic power took advantage of a situation in a free market to combine an already successful business. They have no competition and they are ready to sell! The management consulting firm they hired will take charge of the advertising, the lay-off of employees, and the new way of operating. After hours on hours of research, I have found there are many opinions. What I do know is the term “monopolistic competition” is easy to confuse with the term “monopoly.” The two models are characterized by quite different market conditions. A monopoly is a single firm with high barriers to entry. Monopolistic competition implies an industry with many firms, differentiated products, and easy entry and exit. …show more content…
Competitors would be enticed to improve the growing method making a more perfect potato in a shorter amount of time. Competitors would also be interested in creating their own secret spice to create a new and trendy marketing niche. The idea that advertising creates a monopoly was supported by studies that found high rates of return in industries with high levels of advertising. Consumers will pay more for a product if they see more advertisements for that item. Advertising can be in many forms such as radio, billboards, commercials, magazines and newspapers. Advertising can make you think the same product made by a different company is that more different when in reality they are the same. Some benefits of advertising is that it can convey useful information like pricing, new products or new locations of where a product is sold. Also if the product relates to what type of person they are, it is the marketing idea that the consumer will buy that product. For example, if a Doritos commercial or billboard shows a new flavor and band members are rocking out and eating Doritos, this is marketing to younger people who want to be cool per say. It is as if the consumer takes into account how much the marketing costs and is ok with paying more. I agree that when I see a new product or a new commercial I have no seen, I literally obsess about trying that new product right away. I am sure I am not the only consumer that feels that

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