Download the App!

Get 24/7 study help with the Numerade app for iOS and Android! Enter your email for an invite.

Sent to:
Search glass icon
  • Login
  • Textbooks
  • Ask our Educators
  • Study Tools
    Study Groups Bootcamps Quizzes AI Tutor iOS Student App Android Student App StudyParty
  • For Educators
    Become an educator Educator app for iPad Our educators
  • For Schools

Problem

Sleek Sneakers Co. is one of many firms in the ma…

03:52

Question

Answered step-by-step

Problem 9 Hard Difficulty

For each of the following pairs of firms, explain which firm would be more likely to engage in advertising.
a. a family-owned farm or a family-owned restaurant
b. a manufacturer of forklifts or a manufacturer of cars
c. a company that invented a very comfortable razor
or a company that invented a less comfortable razor


Video Answer

Solved by verified expert

preview
Numerade Logo

This problem has been solved!

Try Numerade free for 7 days

EA
Erwin Antoni
Numerade Educator

Like

Report

Textbook Answer

Official textbook answer

Video by Erwin Antoni

Numerade Educator

This textbook answer is only visible when subscribed! Please subscribe to view the answer

Related Courses

No Related Courses

Principles of Economics

Chapter 16

Monopolistic Competition

Related Topics

How Markets Work

Markets and Welfare

Firm Behavior and the Organization of Industry

Discussion

You must be signed in to discuss.
Top Educators
Recommended Videos

01:56

For each of the following …

03:32

'which of the followi…

00:32

A company faces two kinds …

Watch More Solved Questions in Chapter 16

Problem 1
Problem 2
Problem 3
Problem 4
Problem 5
Problem 6
Problem 7
Problem 8
Problem 9
Problem 10

Video Transcript

this 1 may seem a little confusing at first, but it helps if you try to remember that in some cases consumers, whether it's the end user or an intermediary, sometimes they care much more about price. And then there are other times when they care more about quality and the differences between different products, even if they're in the same classifications of product. Okay, so let's let's try to go through each of these, and maybe it'll become more clear. So for Letter A, a family owned farm or a family owned restaurant, which is gonna be more likely to engage in advertising well, the family owned farm is likely selling to people who are much more concerned about price, in part because they're typically selling to retailers who are then going to sell to the end user. Okay, there's not a whole lot of product differentiation, and the quality is really a pastor fail issue. When a supermarket, let's say, is buying from a farm. Either the food is able to be resold or it's not. There aren't varying degrees there, so someone like that is likely not to engage in advertising. But the family owned restaurant they're competing in a market that is not so much concerned about price. It's more so concerned about quality and product differentiation because they're in a monopolistic lee competitive market. Okay, no one else has the exact same food that restaurant does prepared in the exact same way. But you have a lot of other alternatives to restaurants. Okay, so for the next one letter B, a manufacturer of forklifts or a manufacturer of cars again, same thing. Most consumers are not going out and buying for cliffs. The people who buy forklifts, factories, warehouses there again, concerned with the price aspect. People who are buying cars are more concerned with quality and product differentiation. That's not to say prices and a factor, But a lot of times when you see a car advertisement, what are they highlighting? They're highlighting the quality of the reliability of the car. They're highlighting features that there vehicle has that other brands don't because it's a monopolistic lee competitive market. Okay, so the car manufacturer is more likely to engage in advertising. How about the company that invented a very comfortable razor or a company that invented a less comfortable razor? Well, you can go to most pharmacies or supermarkets for big box stores, and you can find no name. Razors that you've never heard of that are incredibly cheap, and they're not advertised. But the razors that have 456 blades that have waited handle and all kinds of of lubricating and al oh strips and different things those were the ones that are typically advertised again. It's a monopolistic lee competitive market, so the advertising is trying to highlight the product differentiation and the quality.

Get More Help with this Textbook
Gregory Mankiw

Principles of Economics

View More Answers From This Book

Find Another Textbook

Study Groups
Study with other students and unlock Numerade solutions for free.
Math (Geometry, Algebra I and II) with Nancy
Arrow icon
Participants icon
151
Hosted by: Ay?Enur Çal???R
Math (Algebra 2 & AP Calculus AB) with Yovanny
Arrow icon
Participants icon
68
Hosted by: Alonso M
See More

Related Topics

How Markets Work

Markets and Welfare

Firm Behavior and the Organization of Industry

Top Educators
Recommended Videos

01:56

For each of the following pairs of firms, explain which firm would be more like…

03:32

'which of the following are reasons a firm might choose to advertise? '

00:32

A company faces two kinds of risk. A firm-specific risk is that a competitor mi…

Add To Playlist

Hmmm, doesn't seem like you have any playlists. Please add your first playlist.

Create a New Playlist

`

Share Question

Copy Link

OR

Enter Friends' Emails

Report Question

Get 24/7 study help with our app

 

Available on iOS and Android

About
  • Our Story
  • Careers
  • Our Educators
  • Numerade Blog
Browse
  • Bootcamps
  • Books
  • Notes & Exams NEW
  • Topics
  • Test Prep
  • Ask Directory
  • Online Tutors
  • Tutors Near Me
Support
  • Help
  • Privacy Policy
  • Terms of Service
Get started