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Home > Business & Careers > Economics   »   advertising in monopoly

 
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Old May 23, 2007, 08:39 PM
26945325
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advertising in monopoly

hello,
i want to get an answer of a question mentioned below:

why & how advertisement is often used as a combative strategy by a firm?

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Old May 26, 2007, 09:11 AM   #2  
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I read somewhere that firms, particulalry oligopolists, tend to fight for market share through advertising to create and sustain general awareness and brand loyalty. This is in contrast to the option of a tougher, more dangerous price war. The reasoning behind the softer option of advertising as a combative strategy is that they have less to lose - refer to the economic theories on game theory, the kinked demand curve, informal collusion etc to substantiate an answer.
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