Answered

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Which of the following is a reason why individual firms under pure competition would not find it gainful to advertise their product?
a. Firms produce a homogeneous product
b. The quantity of the product demanded is very large.
c. The market demand curve cannot be increased
d. Firms do not make long-run profits.

Sagot :

Parrain

Answer: a. Firms produce a homogeneous product

Explanation:

In a perfect competition, firms produce the same goods and/or services so consumers buy the same thing regardless of which supplier they buy it from.

It would therefore be of no use to advertise because there would be no new interest in a good that everybody already makes. Instead, the advertisement could even help competitors because the benefits of the advertised products will apply to competing products as well so consumers might just go for those.

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